Conversely, the federal government’s latest energy thought-bubble, the “National Energy
Guarantee” or NEG, needs real reform if it is to positively contribute to a clean and green
future that tackles climate change. The NEG, as it stands, is just not good enough. It would
lock in poor energy policy for years to come, at a time when the future of the planet
depends on real climate action. It is economic and climate vandalism that is designed to
placate the ‘COAL-ition’ backbench, rather than deliver a clean and green future for all
Australians.

For a policy put together in a matter of weeks last year, the Prime Minister and Energy
Minister Josh Frydenberg sure do have grand claims for the NEG. They say it will solve
reliability challenges in the electricity grid, reduce greenhouse gas emissions, and save
households money. But a closer look at the policy shows that each of these claims is very
dubious.

The NEG’s emission reduction targets are too weak, which means we won’t achieve our
Paris Climate Agreement commitments. The science shows that we must not break a certain
‘carbon budget’ if we want to avoid catastrophic temperature rises. Meeting the budget
means we must quickly phase out fossil fuels - there can be no Adani coal mines, no new
coal fired power generation, and we must rapidly transition away from gas as an energy
source. But the NEG does the opposite. It would prop up dirty, ageing and expensive coal-
fired power plants, polluting the atmosphere with greenhouse gases that contribute to
global warming. It will also hamper the progress of renewable energy. It’s an intervention at
odds with the climate science, as well as the direction of the market.

A particular problem is that the NEG appears to prevent more progressive states and
territories, like the ACT, from making additional emission reductions. It forces a low 'ceiling'
over the country so that for every extra step the ACT takes to reduce pollution, another less
committed state can simply pollute more.

The Government's claim that the NEG will solve reliability issues in the energy grid looks to
be another false promise. One of the problems with coal fired generators is that they are
poor at responding quickly to changes in energy demand. Our energy challenge in Australia
is one of meeting peak demand - that is, of having sufficient electricity at the times that

energy demand spikes, such as during the afternoon of a heatwave. Not only are coal
generators slow to ‘fire up’, but they tend to fail at the times of greatest need. Coal fired
power stations have now failed several times in Australia’s summer heatwaves, risking
energy shortfalls and blackouts.

The saviour when it comes to peak demand is renewable energy sources like wind and solar.
During the 2017 heatwaves these quiet achievers significantly reduced demand spikes that
threatened the stability of the grid. During one week of hot weather, three of the ACT’s
solar farms generated so much electricity that they returned an estimated $840,000 to ACT
electricity users as an offset against future energy prices. Renewable sources, when
combined with storage such as batteries, respond effectively to the peaks in electricity
demand. Leaders in energy storage, like Tesla and Genex, are warning that the NEG may
also delay investment in storage technologies.

Turnbull and Frydenberg claim the NEG will deliver energy cost reductions to households. In
reality, the NEG is unlikely to fulfil this promise. It will cement the dominance of a few big
energy companies—the so called “gen-tailers” or “energy mafia”—reducing competition
and squeezing out more innovative companies. A group of 10 electricity retailers have even
made a joint statement saying that the various market implications of the NEG would add
more cost to energy for consumers.

As noted economist Ross Garnaut recently said, it is renewable energy technologies—the
very ones the NEG will likely stymie—that will deliver “a decisive reversal of the relentless
and immense increase in electricity prices”.

The ACT needs to ensure our good efforts aren’t jeopardised by a substandard federal
scheme. Dictated to by the dinosaurs on the federal Liberal and National backbenches,
Malcolm Turnbull and Josh Frydenberg have put forward a smoke and mirrors policy that is
actually worse than doing nothing. At this stage, ‘business as usual’ would actually deliver a
better outcome for consumers, for industry and for the planet. It’s time for our federal
leaders to embrace the jobs and opportunities that the renewable energy economy offers,
and to plan a transition away from coal to renewables—like we’re successfully doing in the
ACT.

Much of what comes next depends on the detail. We are expecting to receive a detailed
framework for the NEG from the Energy Security Board ahead of the COAG Energy meeting
on April 20. With our seat at the COAG table, the ACT will be making the case for a better
outcome in the NEG - not just any outcome.

Shane Rattenbury is the ACT Greens Leader and Minister for Climate Change and
Sustainability.