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Ceasefire urged in Coalition's climate and energy wars

2017 was a standout year for renewables, the Clean Energy Council says as it calls for ‘policy certainty’ in 2018

The emissions reduction target in the national energy guarantee is too low to encourage the development of renewable energy projects on a scale sufficient to drive down power prices as Australia’s ageing coal plants retire, according to the Clean Energy Council.

A new report from the council, to be released on Wednesday, says 2017 was a standout year for the renewable energy industry, with the largest domestic rollout of rooftop solar in history, and 16 large-scale renewable energy projects completed, adding 700 megawatts of new generation to the mix.

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But the CEC’s chief executive, Kane Thornton, is continuing to express concern that there is still no long-term unifying energy or climate policy in place, and says the level of emissions reduction planned under the government’s national energy guarantee “is unlikely to encourage the new renewable energy to continue to drive down power prices as our old coal power plants continue to close”.

The council is converging on Canberra this week, as the launch of the report on the state of the renewables sector coincides with another bout of unrest within the Coalition party room over the national energy guarantee.

With the energy minister, Josh Frydenberg, due to meet his state counterparts in August in an effort to secure their approval for the national energy guarantee, the former prime minister Tony Abbott on Tuesday challenged Frydenberg, arguing that the policy should come back to the Coalition party room for debate before the critical August meeting.

Frydenberg rebuffed that push, saying he would bring legislation giving effect to the policy back to the party room after any agreement was struck with the states – without reopening the internal debate the Coalition settled last October.

Abbott’s challenge followed a government MP raising concerns about the impact of high power prices on businesses in his electorate. The chair of the backbench committee on environment and energy, Craig Kelly, also declared that the government needed to do more to differentiate its policies from Labor’s.

While Thornton says public discussion about the national energy guarantee appears to be moving in a constructive direction, the CEC report notes the history of politics scuttling sensible outcomes and observes that Australia remains a distance short of settling its decade-long climate and energy wars.

“Australia’s banks, businesses, major energy institutions and many governments have begun planning for a renewable energy future but there is still no long-term unifying energy or climate policy in place,” the report says.

“In June 2017, chief scientist Dr Alan Finkel delivered a suite of 50 recommendations to improve Australia’s energy security, which became known in industry circles as the Finkel report. The government moved quickly to adopt 49 of these, but ultimately voted to reject the primary recommendation – the introduction of a clean energy target to take effect beyond 2020.”

The report notes that the clean energy target was backed by the energy sector, the business community, the clean energy industry and federal Labor but it was scuttled because of internal opposition within the Coalition, with “a backbench revolt” killing the Finkel recommendation.

Consultations about the national energy guarantee are not yet resolved, it says, noting that state governments have stepped into the breach. “Given the significant uncertainty and relatively low level of ambition on clean energy and emissions reduction from the federal government, many state governments have introduced their own policies and targets.

Frydenberg and Abbott bump heads over energy policy

“This will help to secure job and investment benefits from renewable energy projects as well as helping Australia to meet its emission reduction commitments.”

The report says there are enough projects in the system to meet the 2020 renewable energy target, which underscores a boom in the sector over the past couple of years.

But it points out that the investment boom has followed policy certainty. Investment in renewables stalled when Abbott attempted to wind back the renewable energy target after he won the 2013 election, and rebounded once the ensuing political dispute was settled.

The report says that trajectory “shows that long-term bipartisan policy has been critical for investment in the energy sector, and that policy certainty beyond 2020 is becoming increasingly urgent”.

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