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Could the NEG bring down power prices? It’s hard to be confident that it will

Salim Mazouz and colleagues write in The Conversation (4.8.18) that the final design of the Turnbull government’s National Energy Guarantee promises that the policy will drive down power prices – but there is precious little evidence for this assertion.

‘The final design document for the National Energy Guarantee (NEG), released this week, contains a range of claims about the policy’s ability to drive down both greenhouse emissions and electricity prices. But still there is precious little detail on how exactly these assertions are backed up.

‘Specifically, two claims in the new document released by the Energy Security Board (ESB) are difficult to reconcile with other reputable modelling results.

‘First is the claim that greenhouse emissions will fall further under the NEG than they would in the policy’s absence. But a fine-grained analysis published a week earlier by the Australian Energy Market Operator (AEMO) suggests that the target of cutting emissions by 26% will be met regardless of whether the NEG is implemented or not.

‘If the AEMO analysis is right, the NEG in its currently proposed form will do nothing to cut emissions.’

Emissions policy is under attack from all sides

Marc Hudson writes in The Conversation (7.8.18) that the National Energy Guarantee faces a crunch test this week in meetings between federal and state leaders. The author suggests that, if the climate wars of the past few decades are any guide, Australian policies more often sink than swim when the waters get choppy.

‘Federal energy minister Josh Frydenberg is battling to steer a course for his National Energy Guarantee (NEG) through choppy political waters, ahead of a crucial meeting this Friday on whether to adopt the policy.

‘Since 2014 and the demise of Julia Gillard’s carbon pricing scheme, Australia has been in a well-documented period of policy paralysis (although “mayhem” may be more accurate). Former prime minister Tony Abbott signed off on a 26-28% emissions reduction target to take to the 2015 Paris climate summit (despite later claiming to have been misled by his advisors), and his successor Malcolm Turnbull ratified it as part of the resulting global treaty.

‘In late 2016, Frydenberg’s suggestion that an emissions intensity scheme could help meet the target survived for a mere 24 hours before dying in a Sydney fish market. Next, the Clean Energy Target proposed by chief scientist Alan Finkel proved too hard for the Coalition to get behind.

‘Now we have the NEG, which is on the table at a crunch meeting of the COAG Energy Council on Friday. The table may yet become a chopping block. The policy will only get the nod if the federal government can get the states and territories on board, and then steer the resulting agreement through the Coalition party room. Frydenberg is caught between a rock and a hard-right place.’

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