NATIONAL ENERGY GUARANTEE DRAFT DETAILED DESIGN

Key points:

• The Academy supports the introduction of the National Energy Guarantee, however Australia needs an economy wide strategy for climate change mitigation, not just an emissions guarantee for a subsection of the electricity generation sector.
• Adopting the proposed emissions reduction trajectory implies that all economic sectors will need to achieve a 26 per cent reduction in emissions by 2030 to achieve the Government’s current emissions reduction target. While there are clear pathways in the electricity generation and electricity end-use sectors to achieve and exceed this target, it will be much more challenging and likely more expensive to do so in the transport, direct combustion and agricultural sectors.
• The proposed emissions reduction trajectory in the electricity sector lacks ambition, is expected to be achieved by projects that are already planned, and will slow investment in the electricity sector post-2020 thus putting jobs and growth in the clean generation, energy storage and smart grid industries at risk.
• The electricity sector makes investments that have long pay back periods and life spans and the emissions guarantee requires a long term trajectory to allow the sector to plan for the future.
• The emissions reduction trajectory should be informed by the independent advice of the Climate Change Authority, and subject to regular reviews allow the ambition to be increased if the sector is performing well on emissions reductions, reliability and affordability.
• It is inequitable for non-Emissions Intensive Trade Exposed (EITE) consumers to subsidise EITE activities and, as such, EITE activities should be included under the Guarantee.
• ATSE strongly recommends that carbon offsets are not permitted in the proposed design of the NEG.

For please refer to the full submission for more information.