19/4/18 NEG ONLY DAYS AWAY – BUT WILL IT ANSWER THE ENERGY TRILEMMA?
COAG will decide late this week whether to grant a National Energy Guarantee (NEG), the core of the Turnbull Government’s pre-election power platform.
The NEG aims to encourage large power purchasers, mainly energy retailers, to meet key reliability and emissions targets when buying power.
In so doing, it is aiming to answer the national energy trilemma by simultaneously tackling:
RELIABILITY - delivering power that is highly reliable and dependable, even at times of high demand;
AFFORDABILITY - ensuring that power remains affordable for struggling households and businesses; and
EMISSIONS – continuing to lower emissions at a time when the Australian public increasingly seeks renewable, sustainable outcomes.
The final piece of the trilemma is also being answered at state level.
Only last Friday, the Queensland State Government announced a major new solar farm to be constructed by leading global firm Acciona. The 265MW farm will power the Gladstone region, and then some – with State Minister Cameron Dick stating that it would deliver “five times as much power” as is required locally.
The build is part of the Queensland Government’s goal to generate half of all its energy from renewable sources by 2030.
Other State Governments are operating in a similar space, with the Victorian Government, aiming for 40 per cent of all the state’s power to be driven by renewables by 2025, due to announce 650MW of new contracts in the near future.
South Australia, which already boasts that almost 50 per cent of its power is delivered by predominantly wind renewables, has completed a 100MW battery storage project in late 2017, ahead of the recent 2017-18 summer peak.
The NEM states are clearly powering ahead with their own renewable plans; each aiming to outdo each other and, in doing so, meet ever-increasing levels of renewable, sustainable power.
In this environment, the NEG has much to deliver against; not only in creating an environment that encourages even greater levels of renewable activity; but more importantly, delivering much more affordable energy, and ensuring that high reliability standards are maintained and even exceeded.
There is much discussion on whether it can deliver. Some have raised concerns regarding whether it will assist with significant emissions reductions (“Energy Experts Scathing Appraisal of NEG”). Others believe it will impact the current state-based schemes, with these local programs potentially not counting towards the national scheme (Turnbull Scheme may Curb State Ambition: The Age).
While there is much to be discussed leading up to this Friday, the key question is whether COAG Energy Ministers will ratify the NEG. Given Federal-State political machinations of late, particularly in Victoria, it may be a fair way from a done deal.