Energy minister bows to territory’s call for emissions reduction in national energy guarantee to be reported nationally

This article is more than 2 years old

This article is more than 2 years old

Josh Frydenberg says he is happy for emissions reduction in the national energy guarantee to be reported nationally, not regionally, which is a significant early peace offering to the Australian Capital Territory, which has the power to scuttle the proposal.



In an interview with Guardian Australia, the energy minister said he wasn’t interested in pursuing any side deals with state and territory governments to try and bed down the national energy guarantee, but was open to adjusting parameters that created significant problems for individual jurisdictions.

The ACT’s climate change minister Shane Rattenbury said earlier on Wednesday Canberra would be significantly disadvantaged if emissions reductions in the national energy guarantee were to be reported regionally under the proposed scheme.

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“In the ACT we have set up our windfarms in South Australia, Victoria and northern New South Wales,” the territory minister said.

“They would all be out of our NEG region, and if they didn’t count we couldn’t use those to acquit our emission reduction targets and we had to go and buy our energy somewhere else – we’d end up effectively paying twice.

“That’s one example of a technical issue we need to overcome to protect the ACT’s specific interests.”

Asked later on Wednesday whether he was prepared to address that concern, Frydenberg said regional reporting for emissions reduction wasn’t necessary, provided that the proposed reliability obligation was reported regionally.

“We need a national emissions target, not regional emissions targets,” Frydenberg said. “Reducing our carbon footprint is a national problem requiring a national solution.”

The proposed national energy guarantee would impose a reliability obligation and an emissions reduction on energy retailers and a small number of large electricity users from 2020.

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The reliability obligation is about ensuring there are sufficient quantities of dispatchable power available in the electricity market in each area, and the emissions reduction target is about lowering pollution in the system.



Because the Energy Security Board is yet to release more advanced design principles for the scheme, stakeholders are currently not sure whether the proposed emissions reduction would occur on a geographically neutral basis, or whether it would have to be reported regionally, as is envisaged for the reliability obligation.

Frydenberg said there is a good reason why there should be regional reporting of the reliability obligation to ensure shortfalls didn’t happen in the market, but emissions reduction was a national effort.

He stressed he wanted to reach a consensus around the table next Friday rather than striking a framework with carve-outs or exceptions for individual jurisdictions. “We are not looking for side deals,” Frydenberg said.

“We are looking for all the jurisdictions in the NEM – including the ACT – to come together to secure the national energy guarantee.”

He also made it abundantly clear the states and territories would be able to continue their current renewable energy targets and schemes if the national energy guarantee was put in place.

Energy ministers meet next Friday to consider whether to progress on the national energy guarantee. Individual jurisdictions, like the ACT, have the power to scuttle the Turnbull government’s proposal because changes to the national electricity market require a consensus.

As well as running the gauntlet of the states, Frydenberg also has to get the design principles of the scheme past government colleagues already engaged in a full-scale proxy war about energy, which is linked to the government’s inflamed internal tensions about leadership.

Senior conservative players, Peter Dutton and Scott Morrison, have taken the opportunity of Malcolm Turnbull’s 30th consecutive loss in the Newspoll to articulate their future leadership ambitions, and Dutton has also opened an outright difference of opinion with Turnbull on whether the government discussed changes to the immigration program.

The former prime minister Tony Abbott weighed on Wednesday afternoon. “I thought, look, they’re being very clever with words here,” he told 2GB radio on Wednesday when asked about Turnbull’s denial that a cut to immigration numbers was discussed.

“He’s tried to speak very emphatically in denying something which he knows is substantially true.”

Abbott said the proposal might not have been submitted to cabinet, but it was discussed between cabinet ministers.

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Frydenberg took the opportunity of a National Press Club speech on Wednesday to deliver a warning to colleagues about the consequences of a fresh frolic on energy policy, saying consumers would bear the consequences through higher energy prices.

Some government colleagues have pre-positioned ahead of next Friday’s meeting of the energy council to warn Frydenberg not to overstep with commitments without reference to the party room.

Frydenberg said Wednesday he valued the views of colleagues, but insisted he had their imprimatur to engage in negotiations with the states, before bringing back final legislation to the Coalition party room later in the year.

As well as massaging the states and the colleagues, Frydenberg is also battling another front because of a continuing standoff between the government and AGL Energy.

The government is trying to persuade AGL to sell its ageing Liddell coal plant to the Hong Kong-owned Alinta Energy but the AGL chief Andy Vesey keeps rebuffing the entreaties.

Vesey used a public appearance in Sydney to again dead bat the sale, flagging that his company was already in the process of executing a planned transition at the site by purchasing new equipment.