Given the Turnbull government’s attitude to energy generation, the name of the department that hosts the energy.gov.au website is oxymoronic in that it is the Department or the Environment and Energy. On that website, it states: “The Australian Government is powering forward with a plan that will deliver an affordable and reliable energy system that will also help meet our international commitments”1. It is difficult to be sure whether or not the author of this was attempting to take the piss out of the federal government, it seems so inept and inapt. Given what is in the government’s National Energy Guarantee (NEG), I am inclined to think the author was taking the piss.
The NEG is supposedly the government’s policy mechanism and is designed to retain existing resources and encourage new investment in the National Energy Market, while attempting to ensure that emissions standards are met and the system operates reliably. If implemented, the NEG will consist of two main parts: a reliability guarantee and an emissions guarantee2.
The reliability guarantee requires electricity retailers to invest in enough dispatchable energy resources (e.g. coal, gas, hydro, battery) to cover a set amount of their peak load in a region if a shortfall is predicted. The emissions guarantee requires electricity retailers to meet a defined emissions intensity level for the electricity they purchase from the wholesale market2.
What does this mean? As Simon Holmes àCourt said on The Drum on ABC Television: “The National Energy Guarantee [NEG] is an attempt to put a band-aid on the festering wound within the Coalition on energy policy”. He further explained: “There are two parts to the NEG. On one end, we’ve got a thing called ‘the reliability guarantee’. What happens is that the Australian Energy Market Operator, or AEMO, every year, does an analysis of whether or not the reliability target is threatened. We have a 99.998% reliability standard. We’ve always had that standard, and we haven’t breached that standard since 2009, I believe. So, Australia has an incredibly high reliability of our grid. You wouldn’t necessarily know it from the debate. So, the reliability guarantee sits dormant. The other part of the NEG is the emissions guarantee. In effect, it is an emissions intensity scheme. They will be trading allocations of carbon [pollution] between retailers and generators, so, for all intents and purposes, it is an emissions trading scheme. The emissions intensity scheme comes in in 2021 and the current modelling is that we’re going to hit the target in 2021. So, I guess it’s a dial, dialled down so low, it actually won’t do anything. Why I said it’s set too low is because the Energy Market Operator’s integrated system plan that came out last week has said that basically, under business as usual, the NEG’s goals will be met anyway. So, basically, whether we implement it or not, makes no difference to the outcome of the emissions reduction in the energy sector. Right now, Australia’s best policy minds are working really hard to design this policy that does nothing”3.
So, the NEG could be construed as a policy which achieves nothing. While this will be its effect on reliability and emissions, that is not its point. It is purely designed as a fig-leaf, to give the appearance of actually having a policy. This clearly demonstrates that the climate change denying halfwits of the Monash Forum, and their acolytes, are in control of the Liberal Party, and no policy is the only acceptable policy for them. Their main aim is to protect the coal industry at any cost, because the coal industry are significant donors to the Liberal and National parties. The crime of treason should not be restricted to periods of conflict4.