Australia’s government has dropped plans for introducing a
Clean Energy Target (CET) post-2020, opting instead for a technology-neutral
plan that it claimed would prioritise reliability and bringing prices down.
The new policy, known as the National Energy Guarantee,
hands power to the nation’s utilities allowing them to choose the energy mix
that suits them, with no real driver or target for clean energy, and no clear
subsidy or direction once the Renewable Energy Target (RET) comes to a close in
2020.
The Department for Energy and Environment stated: “The
government is acting on the Chief Scientist’s recommendation that new measures
are needed to improve reliability and investment certainty in the electricity
sector. To do this, we will take the advice of the independent Energy Security
Board and implement a new National
Energy Guarantee.”
However, the move actually ignores the recommendations of
Australia’s chief scientist Alan Finkel, which included introducing the CET.
Government rhetoric around grid reliability issues also once again pointed the
finger at the increasing penetration of renewables such as wind and solar into
the grid.
The government also stated: "Past approaches have
ignored reliability and affordability, rewarding some industries, punishing
others and slugging consumers. We are taking a very different course. The
National Energy Guarantee does not pick winners – it levels the playing field
and is technology-neutral."
The industry is still awaiting the finer details on quite
how the new Guarantee will play out and while its full impact on renewables is
unclear, most clean energy bodies have criticised the move.
Australian Solar Council chief executive John Grimes said
the government’s decision meant there would be no renewable energy policy after
2020, while the new National Energy Guarantee would increase the cost of
renewable energy projects.
He added: “It is hard to imagine a worse policy.”
He also said the policy flies in the face of the Australian
public, which is taking up solar and storage with great enthusiasm.
The decision is expected to yet again impact investor
confidence in Australian renewables, in a similar way that politicking
around the Renewable Energy Target (RET) two years ago stifled
investment.
The Clean Energy Council (CEC) said the government had blown
a “golden opportunity” by dropping the CET, and said it is likely to result in
a substantial slowdown in new clean energy investment, meaning power prices
will actually keep rising.
CEC chief executive Kane Thornton said: “The Clean Energy
Target was the best opportunity in years to lock in the long-term bipartisan
energy policy needed to encourage investment in cleaner energy while improving
system reliability and pushing down power prices.”
Campaign group Solar Citizens described the move as “deeply
concerning” and said it would mean individual states would have to be the main
drivers of renewables. The group also expected power prices to go up rather
down as a result of the policy change.
Maria Cirillo, acting national director of Solar Citizens,
said: “Solar and wind with storage is the cheapest form of new electricity
generation, the Turnbull Government needs to stop propping up old, polluting
sources of energy.”
Prime minister Malcolm Turnbull said in an online video:
“These guarantees will ensure there is a place for all power sources in the
nation’s future energy mix - solar, wind, coal, gas, batteries, pumped hydro.
Our plan has no subsidies, no certificates and no tax.”
Australia’s energy sector is fraught with divisions over
what has caused blackouts
in South Australia and load-shedding issues in New South Wales. While
often being accused of driving these reliability issues, solar and wind clearly
offer the cheapest sources of power. Old fossil fuel-based plants are being
shut down while alternative technologies such as rooftop solar are increasingly
being taken up, leading to further rifts in the wider energy sector.
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