By Glen Klatovsky, 350 Australia Deputy CEO

The National Energy Guarantee (NEG) represents the culmination of more than a decade of policy chaos from Canberra on the issues of energy and climate.

The NEG is the result of the disastrous leadership of the climate denialists in the federal Coalition, the crude anti-science functionaries of the coal industry in this country. Australia opposes the NEG.



We have huge concerns about its design and the fundamental problem that it only addresses the energy sector, leaving all other emission sources regulation free. The energy sector will only be responsible for reducing emissions by a negligible amount – 26 per cent – yet it is the sector which has the greatest potential to cut emissions over the next decade.

Meanwhile, analysis by Reputex shows that the NEG as currently designed will have a negligible positive impact in encouraging more renewable energy.  The Smart Energy Council, which represents more than 1,000 renewable energy organisations, is scathing in its assessment of the NEG. Its analysis sees a dramatic drop in renewable energy projects in the first part of the 2020s.

The more astounding fact found by Reputex is that if the NEG has the low emissions target of the government (26% reduction from our 2005 emissions) the prices of electricity will be higher than if the target of 45% reduction is implemented. This is because the higher target encourages more renewables which are cheaper than existing coal-fired power stations.

The notice period to change the emissions reduction target in the NEG is currently set at 10 years. This means that if a new government wanted to increase the ambition of the NEG on emissions targets it will require legislative change, probably through the Senate crossbench.

Over the next month the federal energy minister, Josh Frydenberg, will be trying to convince his own party, the federal ALP and all states and territories to support the NEG. His goal is to get the Council of Australian Governments (CoAG) Energy Ministers meeting on August 9 & 10 to endorse the NEG and agree to implement it.

The government has managed the introduction of the NEG appallingly. It has provided minimal opportunity for community input. For the states and territories, there are literally only a few days in which to decide whether or not to sign on to the NEG. A state Energy Minister will need to explain the final design to their Cabinet, relevant departments and Ministers and their Premier between the release of the final design on August 2 and the CoAG meeting on August 9.

And there is no chance for states and territories to undertake their own community consultation on such a fundamental change to the National Energy Market. For states and territories like Queensland, Victoria and the ACT, all of whom have ambitious renewables targets, the NEG will have an impact on their commitments.

This is why we are encouraging the Energy Ministers from Queensland, Victoria and the ACT to stand up against the NEG. As currently designed it fails on emissions, it fails on lower prices and it completely fails to meet community expectations.

Australia desperately needs an effective climate change and energy policy – but the NEG is not it. As it currently stands, the NEG is worse than nothing at all.