Australia’s energy strategy clouded by coal-friendly lobbies

With elections looming for the state of Victoria in November, a lucid, clear cut energy policy could be a challenge for the coalition government.

Australian states are set to vote on a new energy policy this coming Friday which could potentially spur investments in new energy sources and tougher emission targets.

In a strong and strategic measure to bring down electricity prices in the country, Prime Minister Malcolm Turnbull is pushing the National Energy Guarantee (NEG) towards reliable, green, energy efficient power systems.

Electricity prices in Australia have more than doubled in the last decade.

“The National Energy Guarantee is a historic reform. It should be supported in the national interest. It will deliver lower prices, cleaner energy and a much more reliable energy system,” said Josh Frydenberg, Australia’s Energy Minister.

Under the NEG, power retailers, led by Origin Energy, AGL Energy and Energy Australia, would be required to meet reliability and emissions targets.

Austrlia’s energy strategy aims to ensure that there is sufficient “dispatchable” power to back up intermittent solar and wind energy, thereby cut the country’s carbon emissions from the sector by 26% from 2005 levels and thereby meet Australia’s Paris Climate Accord commitments.

Modeling showed the National Energy Guarantee would bring down wholesale power prices by more than 20 percent from where they would be without the policy.

The framework has won broad support from power producers clamoring for clarity on carbon policy to support new power plant investments, as well as from businesses, farmers and consumer groups battling high and volatile electricity prices.

“It’s not perfect. But what it does do is present Australia and investors with certainty…I sincerely hope that reason prevails on Friday and we get an agreement on the NEG,” said Nigel Garrard, managing director of Orora Ltd, a packaging manufacturer.

The framework was designed by independent experts on the Energy Security Board to be technology-neutral and not involve setting any price on carbon emissions, in order to secure support from the Coalition government’s right wing.

Negotiated over nearly a year, the plan needs unanimous assent from all six states to go ahead.

However, in the state of Victoria, with the Labor government facing an election in November where it could potentially lose seats to the Greens, the coalition government is likely to face strong headwinds.

Pro-coal former Prime Minister Tony Abbott and rural-party Nationals members in Turnbull’s coalition do not want to give any future Labor government the power to easily raise emissions reduction targets and make coal-fired electricity less competitive.

“We can still get this right — but only if Malcolm Turnbull stares down the climate-crazies in his party,” said Victoria’s energy minister Lily D’Ambrosio.

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