Energy industry executives say policy uncertainty will drive down new investment

Australian Financial Review.Australian Financial Review.

Energy and industry executives say government energy policy uncertainty in Australia will kill investment in new energy projects, according to an AFR report.

The abandonment of the National Energy Guarantee (NEG) and the separation of the energy and climate ministries has created an energy policy vacuum.

In turn this has led to several industry executives issuing warnings to new Energy Minister Angus Taylor. These warnings are largely about the impact this could have on investment, jobs and economic growth in Australia.

NEG-ative reactions: What industry chiefs are saying:

  • Mark Collette of EnergyAustralia says commitments to large projects requires confidence and policy stability, which are both lacking. Collette also said the government has now put the onus back on the industry itself to deliver more affordable, reliable and cleaner energy.
  • Innes Willox of the Australian Industry Group says it will be hard to reduce prices until industry knows what the long-term rules on energy and emissions are. However, Willox also told ABC radio that separating the energy and environment portfolios makes sense in the current political environment.
  • Jon Stretch of ERM Power indicated we are further away than ever from an enduring bipartisan energy and climate policy. He said this is essential for “reliability, affordability and environmental outcomes”.
  • Andrew Richards of Energy Users Association of Australia said energy policy is now not even back at Square One. Rather, it is behind it, and “into negative territory”.
  • Ed McManus of Meridian Energy and Powershop says most Australians support renewable energy, such as hydro, wind and solar power.

Australians want end to energy policy uncertainty

energy policy uncertainty

A 2018 Lowy Institute poll found 59 percent of Australians want action on global warming even if it costs

A recent Lowy Institute poll supports what Ed McManus is saying. The poll, which involved a representative sample of 1,200 Australians, found that:

  • 84 per cent agreed that the “government should focus on renewables”, even if it requires more infrastructure investment.
  • 59 per cent agreed that climate change is a “serious and pressing problem”. The same percentage also agreed we should take steps to tackle it even if it’s costly.

Despite the uncertainty around federal policy, one thing is certain: the number of rooftop solar installations is growing. This indicates that instead of waiting around for the federal government to act, households and businesses are taking steps themselves to secure cheaper and cleaner energy by installing solar panels.