Turnbull Abandons Clean Energy Target For 'Technology Neutral' Plan

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Malcolm Turnbull has once again pushed the idea of a "technology neutral" approach to energy policy, after scrapping the Clean Energy Target recommended by Australia's Chief Scientist Dr Alan Finkel - which Tony Abbott had previously referred to as a "tax on coal". The CET will now be replaced with a National Energy Guarantee, a scheme with a focus on reducing power bills and guaranteeing reliability through focusing on so-called "dispatchable" generation.

Last night a Coalition party room meeting signaled the end for Finkel's Clean Energy Target, one of the key recommendations of this year's Finkel Report. Tony Abbott labelled the decision as "progress", while Greens leader Richard Di Natale has slammed the decision as a "complete capitulation from Malcolm Turnbull".

The decision was supported by Liberal climate denier Craig Kelly, who downplayed the magnitude of rejecting the Clean Energy Target, when he claimed that "the Finkel Report contained 50 recommendations, now if we've recommended 49, that's a 98 per cent strike rate.

"I think there's very few reports made to Government or to COAG that have actually had 98 per cent of their recommendations adopted, so I think he can be pretty happy if he gets 49 out of 50."

Unfortunately by reducing it to just one of many, Kelly's argument ignores the fact that the CET was a major part of the Finkel Report. Kelly also suggested taking action on climate targets might be better left until even later, due to the technology "becoming cheaper every year".

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While many had hoped the Finkel Report would signal an end to the partisan politics affecting energy reform, the announcement of the still-vague National Energy Guarantee seems set to drag it on even longer. While Turnbull has heralded the new plan as an "opportunity to break free of the climate wars of the past", this announcement seems like a very firm continuation of it.

"Australia needs a bipartisan approach to develop a stable energy policy, as we saw at the introduction of the renewable energy target, to give the industry the confidence to plan for the future," said ANU's Dr Matthew Stocks.

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The details on the Coalition's new plan to replace the CET are still thin on the ground, but at present the focus seems to be on reliability and lowering energy prices. Here are the details from a video posted to Malcolm Turnbull's Facebook page:

  • The Guarantee is made up of two parts:
  • ✔A reliability guarantee to ensure that energy is always available
  • ✔An emissions guarantee to contribute to Australia’s international commitments
  • The Guarantee builds on our existing energy policy including:
  • ✔ ensuring energy retailers offer consumers a better deal
  • ✔ delivering more gas for Australians before it's shipped offshore
  • ✔ building Snowy 2.0 to stabilise the system
  • ✔ stopping network companies gaming the system

The video also promised 'no subsidies', despite the latest Newspoll revealing 63 per cent of Australians believed that subsidies for renewables should be continued, despite the costs of renewable technologies continuing to fall. Only 23 per cent of respondents believed that subsidies should be removed.

"[Renewables] are now competitive with new builds of thermal power," Turnbull said at a press conference today. "There is no need for a subsidy. They can compete on a level playing field." Yet Turnbull's seemingly idealistic ideal of equality between technology types ignores both the potential of renewable energy and the diminishing returns of fossil fuels.

"Nations with stable incentives for investment in the renewable energy sector will see growth in their economies and in employment rates," said Professor Tom Faunce of the ANU College of Law & Medical School. "Coal-fired power stations and fracking pollute the environment and create fewer new jobs than a booming renewable energy sector. If Australia doesn’t create a stable platform for renewable investment it will be left behind in the race for next generation clean energy technologies."

The NEG was described by Turnbull as a way to "ensure there is a place for all power sources in the nation's future energy mix: solar, wind, coal, gas, batteries and pumped hydro." Lumping energy storage technologies in with energy generation ignores the potential of storage to increase the reliability of renewable generation - a role the Coalition seems to believe only gas and coal can fill.

"As the Prime Minister points out, pumped hydro storage (including Snowy 2.0) is highly effective and cost competitive," said Professor Andrew Blakers on the potential for storage technologies to complement and augment a renewable-focused grid. "Pumped hydro can be built fast enough to stabilise any amount of solar and wind at lower overall cost than any fossil fuel alternative."

All this rhetoric espousing the supposed dangers of what are referred to as "intermittent" renewables are ignoring the inherent problems with relying on coal and gas. Firstly, there's the concern that the NEG may rely too much on old coal-fired plants that will only become more unreliable as they age. In fact, while the Coalition seems to be implying coal and gas can both provide reliable, quickly dispatchable generation, coal plants are more often designed as "base load" plants that can take hours or even days to cycle off and on.

While gas is more common as dispatchable generation, we still face the issue of increasingly high gas prices and unreliable supply. Too much reliance on gas in our energy mix will only push electricity prices higher.

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The NEG recommendation was apparently made by the newly-formed Energy Security Board created, ironically, on Finkel's recommendation. The board was only established in early August of this year. While the ESB is concerned with energy security and reliability, emissions targets are not part of its scope.


Thankfully the NEG does leave some room for emissions reductions, promising reductions in line with Australia's international climate commitments. "The obligation to have a reliable power system is now intimately linked with an emissions reduction target," said Energy Security Board chair Dr Kerry Scott.

The new scheme works on an "energy intensity calculation", which would require retailers to buy efficient power in line with Australia's Paris target - a reduction of 26-28 per cent on 2005 levels by 2030. While the Government is confident that the NEG can help Australia meet its targets under the Paris agreement, this confidence doesn't hold up to expert scrutiny.

Experts have called for the electricity sector to take on a larger responsibility for emission reductions, with more cost-effective options to cut emissions than any other industry. There is a risk that consumers may end up paying even more in other places if the burden of climate targets falls on other, more costly industries. "The cheapest way to meet the Paris emissions target is by increasing the renewable energy share of electricity to 50 per cent," said Professor Andrew Blakers. "It is not clear whether the NEG can do the heavy lifting for the rest of the economy that will be needed to meet our Paris targets," added Professor Ken Baldwin.

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And in case we've all managed to forget, while tropical storms ravage Ireland and half of California burns in intense wildfires, this policy is about more than just your quarterly power bill. "In a modern world, energy security is not just about reliability and affordability. It is also about sustainability. It has to be," said Samantha Hepburn, Director of the Centre for Energy and Natural Resources Law. "The well being of future generations depends upon it. The production of energy is one of the highest sources of greenhouse gas emissions. Climate change imperatives are driving decarbonisation across the globe. Supporting the transition to less carbon intensive energy production is a critical component in this process."

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