August 9 (Renewables Now) - The Clean Energy Council (CEC) in Australia is calling for a more ambitious emissions reduction target in the National Energy Guarantee (NEG) and it is also proposing several “important tweaks” in the policy.
“[..] there’s not much point legislating a target we will meet by default and which won’t actually do anything to encourage new investment,” said Kane Thornton, CEO of CEC, which is the peak body for the renewable energy industry in the country.
Thornton said a higher emissions reduction target is needed to create enough certainty for new investments in wind and solar projects, which will help drive down power prices.
“While old coal-fired power stations continued to close over the last decade, chronic policy uncertainty driven by partisan power politics meant Australia did not invest enough in new energy generation to replace them. Wholesale power prices surged and we all paid for it,” Thornton said in a statement on Wednesday. “The wave of new wind and solar projects being built under the RET between now and 2020 means this trend is finally reversing. There are projections new renewable energy will deliver about AUD 400 in annual savings for households next decade.”
In its response to the Energy Security Board’s consultation on the NEG Draft Detailed Design and accompanying Technical Working Papers, CEC says the renewable energy industry is disappointed with the proposal to adopt a 26% emissions abatement target for the energy sector under the NEG as at that level, the target would deliver little or no new investment.
“The energy sector can and should deliver a greater contribution to Australia’s emissions abatement target given the availability of low cost abatement in the energy sector, particularly relative to other sectors of the economy such as transport and agriculture.”
The CEC has listed a number of other NEG design issues that need to be addressed, such as the exclusion of Western Australia and the Northern Territory from the emissions reduction target, even though these regions have material emissions footprints for the electricity sector. The trade association further said future attempts to cut the emissions reduction target have to be prevented and it is asking for a clearly defined penalty price for non-compliance. It is also calling for a requirement for more frequent reviews of the target so as to be sure it is up-to-date with the changing energy market.
In its response to the consultation, CEC also argues that owners of rooftop solar capacity need to be given the choice as to where the emissions abatement from their systems goes, while in the current version of the NEG the net exports from small-scale solar photovoltaic (PV) systems would authomatically count as zero emissions generation for the relevant retailer’s load.
“By allowing customers to opt-in, we believe this would incentivise retailer innovation and competition as retailers would look to develop new products that reward customers in return for their zero emissions generation.”
The full response is available at www.cleanenergycouncil.org.au/dam/cec/policy-and-advocacy/submissions/2018/national-energy-guarantee-draft-detailed-design-consultation-paper.pdf