Josh Frydenberg says states are ‘politicking and posturing’ on National Energy Guarantee

Will the NEG keep the lights on?

Josh Frydenberg has described the Labor states’ demands for National Energy Guarantee changes as “politicking and posturing”.

The Federal Energy Minister was responding to a demand from Victorian Energy Minister Lily D’Ambrosio that the Coalition party room vote on the NEG before states approve it. The ACT, Northern Territory and Queensland governments have also voiced concerns over the issue and are advocating National Energy Guarantee changes.

The response comes as a ReachTel poll indicates more than 70 per cent of Australians want the government to set a high renewable energy target to put downward pressure on power prices.

National Energy Guarantee changes dismissed by Energy Minister.

Has the Turnbull Government’s National Energy Guarantee already blown its chances of success?

Frydenberg told ABC Radio National’s Fran Kelly this morning: “The states know that what will, hopefully, occur on Friday is that we agree to the design of the National Energy Guarantee, subject to a phone hook up after the policy has been through the Federal Coalition party room.”

The draft policy will then be available for comment for four weeks before the states sign on, he said.

“So there’s still some time to go. But importantly we’ve seen a broad cross section of industry and consumer groups out strongly in support of the National Energy Guarantee, saying any delay will be denying people lower power prices.”

Coalition party room in support of NEG

When challenged on Coalition support for the NEG, Frydenberg said there was “strong, overwhelming support” for the policy.

“We saw on the weekend former prime minister John Howard come out in support of the National Energy Guarantee too.”

He said Coalition colleagues had been told by industry, mining and farming sectors that the NEG was needed for stability.

However, he added, there were “some usual voices” of dissent.

“Anybody who opposes the National Energy Guarantee will be condemning the families and businesses of Australia to higher power prices.”

Labor states demand National Energy Guarantee changes

The Labor states’ demands include only increases in the NEG emissions target and a review every three years, not five.

Kelly challenged Frydenberg on the fact that the NEG’s targets are too low. Frydenberg said the NEG represented a $550 annual saving on electricity bills to households and a 20 per cent reduction in wholesale prices.

“Nothing in this policy stops the states from having their own renewable energy targets,” he added. “They complement what is being done at the federal level. But this is a national problem and it requires a National solution. It’s the Federal Government that is the signatory to the Paris Agreement, not the states.”

Federal government only must change NEG target

The NEG emissions target is up for review in 2024. However, Frydenberg said the best way to change the target was through legislation, not regulation.

He warned that a regulator could arbitrarily increase the target, causing “consequences for the energy companies”.

“You can’t just flick a switch to turn a target from 26 per cent to 45 per cent,” he said.

“We have a very clear indication from the Energy Security Board that this policy is the best in the world.”

Despite the NEG’s lack of ambition on targets, households around Australia continue to sign up for solar installations to lower their power bills.

The NEG goes before the states and territories for approval on Friday.