National energy guarantee: Queensland warned it risks 'writing a blank cheque'

Smart Energy Council says state should reject Neg or make support for guarantee conditional

The Smart Energy Council is urging the Queensland government to make any support for the Turnbull government’s national energy guarantee conditional, or it will risk dealing itself out of leading the effort on emissions reduction.

With the fate of the Neg to be determined at a definitive meeting of state and federal energy ministers in early August, the Queensland government has called in stakeholders for a meeting on Thursday to help determine its position on the policy.

The Smart Energy Council, which represents the solar industry, and environmental groups, including the Australian Conservation Foundation, are lobbying the Labor states to either reject the Neg in its current form or to make their support for the mechanism conditional.

Thursday’s meeting in Brisbane follows the publication of a new report by Australia’s competition watchdog that recommended a radical overhaul of the energy sector to boost competition and lower prices for consumers.

It also comes as the Nationals and conservative Liberals are continuing internal lobbying efforts to persuade Malcolm Turnbull and Josh Frydenberg to sign up to transitional assistance for coal as part of any settlement of the Neg.

While a coal deal would pacify some dissenters in the Coalition party room, it could blow up state sign-off on the policy, because some of the states are concerned the Neg’s emissions reduction target already lacks ambition.

Implementing the Neg requires consensus from the states and territories – with any jurisdiction having the power to sink the policy. It is also possible for jurisdictions to abstain in deliberations of the Coag energy council.

Stakeholders are now intensifying their lobbying efforts ahead of the release of final technical details of the Neg at the end of this month.

John Grimes, the chief executive of the Smart Energy Council, said ahead of his talks with the Queensland government on Thursday that the state needed to resist being railroaded into a definitive stance.

Grimes said the release of the final technical details of the policy would not happen until the end of July, and then states were being asked to say yes or no only a week later, with new inputs emerging all the time, such as the new Australian Competition and Consumer Commission report and the Nationals’ push in Canberra on coal subsidies.

He pointed out that the new ACCC report had recommended that state governments should pay for solar feed-in schemes from their budgets rather than charging other electricity users, and also proposed the small-scale renewable energy scheme, which drives Australia’s booming rooftop solar installations, be wound down and abolished by 2021 – which were new ideas in the energy policy mix.

“We are talking about the future of Australia’s energy sector and, particularly, the future of the renewable energy industry,” Grimes told Guardian Australia. “Queensland really has to take the time to get this right.”

He said the Neg’s emissions reduction target for electricity of 26% on 2005 levels by 2030 was considerably less ambitious than Queensland’s state target of achieving 50% renewables by 2030.

Grimes said if Queensland took the decision in August to back the Neg, it would need to demonstrate to the industry “through the state budget how they will fund the build program for the state target”.

He said the Palaszczuk government needed to ensure it was not railroaded by the commonwealth into supporting the mechanism and then discover later it was “writing a blank cheque”.

Grimes said the state should consider providing support only on the condition that the commonwealth increased the ambition in the emissions reduction effort “otherwise they will deal themselves out of driving emissions reduction”.

While a minority of stakeholders want to scuttle the Neg on the basis that it is complex, and won’t drive any meaningful emissions reduction, and will spell the end of subsidies, governments are also under pressure from a range of other groups who want agreement August in order to create certainty for investors.

A range of groups, from the Business Council of Australia to the National Farmers Federation, to the Clean Energy Council – the peak body for the renewables industry – is urging the commonwealth and the states to come to terms, and settle the decade-long climate and energy wars.

Contributor

Katharine Murphy Political editor

The GuardianTramp

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