NEG plan powers on
FEDERAL and State energy ministers have agreed to progress to the final design stage of the National Energy Guarantee (NEG); the Federal Government’s shiny new energy policy that aims to deliver more affordable and reliable electricity. Formed last year by the COAG Energy Council’s recently established Energy Security Board (ESB), the NEG will be made up of dual guarantees that require electricity retailers across the National Electricity Market (NEM) to meet their load obligations with a portfolio of resources. In April, ministers declared their support for further consultation on the design. “As part of this process, ESB will consult with jurisdictions on the specific details of the design,” COAG stated. “The meeting noted that the States have raised issues that will require further work ahead of the August meeting. “Ministers agreed to convene again in a phone hook-up in June to discuss the progress of the detailed design.” Federal energy minister Josh Frydenberg said “there was a lot of good will in the room, and while there is still much work to do, there was a commitment to getting an outcome in August”. He added that modelling undertaken by the ESB showed wholesale electricity prices could decrease by 23 per cent under the Guarantee. Ai Group chief executive Innes Willox said months of hard work were now required to have a fleshed out scheme for adoption in August. “It will be particularly important to forge compromise between the Commonwealth and the States, and both sides of Federal politics, over emissions reduction ambition,” Mr Willox said. "It is clear that the scope of ambition will continue to evolve, and that all sides are committed to their approaches.” Victoria, for example, has not held back its hesitation in signing the NEG, claiming that States’ own renewable energy targets need to be honored under any agreement. “We will act in good faith on the development of the NEG… [but] significant issues remain to be addressed in the High Level Design Document and Commonwealth Design Elements paper, including setting the emissions target, EITES, offsets, State additionality, the setting of the reliability standard, and market power mitigation and other technical matters,” Victoria Energy, Environment and Climate Change minister Lily D'ambrosio said.