Government policies, largely involving renewable subsidies, have caused Australian electricity costs and prices to escalate and to become among the highest in the world. The NEG shifts the basis of the deleterious subsidy regime to become an emissions intensity scheme or carbon tax.
Though ostensibly responsive to the Paris Agreement, the NEG is actually an industry policy proposal designed further to shift Australia to an “inevitable transition to a clean energy future”.
On the basis of harmful and cripplingly expensive subsidies, renewables have much increased their market share. But their on-going need for subsidies, as well as undermining the industry as a whole and increasing prices, indicates an on-going lack of commercial competitiveness.
The NEG’s claim to bring about policy certainty is not credible:
- The Paris Agreement is dysfunctional, applies to at best 20 per cent of global emissions and will inevitably collapse.
- The political forces within Australia have vastly different aspirations for renewable energy and coal.
The NEG will not promote reliability since the absence of this is a consequence of the many interventions it seeks to pursue by alternative means. In attempting to proceed along this well-trodden path many billions of dollars will be wasted and prices to households and businesses will remain cripplingly high.
The only sensible policy approach is for the government to unwind all subsidies and to call for tenders for new despatchable electricity generation on the basis of long term contracts.
All these issues aside the NEG is seriously remiss, even within its own framework because it:
- Does not reduce emissions at least cost.
- Discriminates in favour of some electricity customers and suppliers in favour of others.
Read submission here