Hon Josh Frydenberg MP has met with key stakeholders and State Energy Ministers once again after months of consultation to discuss the National Energy Guarantee.
The final design of the NEG was released before the meeting, and industry groups and big businesses have come out in support of the stable power policy. Opposition largely comes from those who believe that the emissions target is not adequate. It should be noted that the emissions target and the reliability guarantee are two different parts of legislation, and the NEG needs to be separated from the target set by the Federal Government. There has also been criticism of the modelling done. Here at Flow Power, we’re working with the Energy Security Board to understand what it could mean for our customers.
The messages released in the wake of the meeting vary but the outcome is the same. The Energy Security Board is calling this a step forward and the Victorian Government is describing it as a “postponed approval” – either way, it’s now up to the Coalition to agree on the legislation.
Why is it going to Canberra first?
The reality is that the Federal Parliament must to sign off on the NEG at some stage. Given that states had “postponed approval”, this step pushes the discussion to the party room rather than needing bi-partisan support. While most states were willing to sign off on the current form of the NEG, Queensland, Victorian and the ACT had further suggestions. The main opposition from the states centres on the possible impact on investment in renewable energy. We’re happy to let them know that Corporate PPAs will be able to support large amounts of their targets, with or without the NEG.
So what does that mean?
The legislation will go to the Coalition Party Room on Tuesday for approval. If it clears that hurdle, it will be released for public consultation. Once that process is complete, the NEG will still need to be approved by the states before being put through the SA Parliament. This decision does make the timeline tighter for getting it into SA by the end of the year.
And will it change what I pay for power?
The latest Market Wrap talked about how the spot price was outperforming contracts significantly. The ASX Energy contracts show that the market is predicting that power prices will go down. This is reflected in the modelling done under the NEG, so it’s hard to separate the impact of the market settling down and the implementation of the NEG.