Victoria has baulked at signing up to the Turnbull government’s national energy guarantee, saying it will only back a plan that supports its own, more ambitious renewable energy targets.
State Energy and Environment Minister Lily D’Ambrosio said the Andrews government would not compromise on its own legislated renewable energy and carbon reduction targets for the sake of striking a deal with Canberra.
“We want a genuine commitment from the Turnbull government for bipartisanship in lowering emissions, growing renewables and market reform,” Ms D’Ambrosio said.
“There are thousands of Victorians’ jobs and billions of dollars of investment riding on this and we will not compromise on that.”
Energy ministers are due to discuss the federal government’s policy at the Council of Australian Governments meeting in Melbourne on Friday.
Federal Energy and Environment Minister Josh Frydenberg said it was critical for states to grab the opportunity, or consumers would pay the price in the form of higher power bills and a less reliable energy grid.
He said the scheme would contain no new subsidies, taxes or trading schemes, ensuring roles for coal, gas and renewables in Australia’s energy mix.
“The strength of the guarantee is that it will get the market working again for consumers, delivering the right investment signals to generate the right investment in the right place at the right time,” Mr Frydenberg said.
“This is the first opportunity to effectively integrate energy and climate policy, and it cannot be missed.”
Australia has a target to reduce its emissions by 26 to 28 per cent on 2005 levels by 2030, as part of the Paris agreement to limit average global warming to well below 2 degrees.
The proposed national energy guarantee would establish an emissions guarantee in the electricity market alongside a reliability guarantee.
It aims to ensure Australia meets its emissions-reduction commitment while also making sure a minimum amount of dispatchable energy is available to meet the needs of consumers.
If agreed to by all states and territories, it would apply from 2020.
Any state that has set its own more ambitious renewable energy target, as Victoria has done, would need to also meet the reliability guarantee.
“Reliability will need to be maintained,” Mr Frydenberg said.
Last year Victoria legislated a target of 25 per cent renewable energy by 2020 and 40 per cent by 2025.
It has also legislated a target of zero net carbon dioxide emissions by 2050.
Last month the Andrews government released an issues paper on how Victoria might reach its emissions reduction targets from 2021 to 2030.
An independent panel chaired by Greg Combet, will recommend by February next year a series of interim five-yearly targets that will ultimately steer Victoria along its path to zero net emissions by 2050.
The paper states that Commonwealth targets will affect Victoria’s emissions.
“If Commonwealth policies do not drive a reduction in Victoria’s emissions, further Victorian action will be needed to keep Victoria on track to meet its legislated target of net zero emissions by 2050,” it says.