South Australia and ACT outvoted on national energy guarantee

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Government secures agreement to continue work on its proposed mechanism without direct comparison with alternative schemes

Jay Weatherill’s SA government and the ACT were one vote short of a majority.
SA’s Jay Weatherill and the ACT were one vote short of a majority over the energy guarantee. Photograph: Mark Brake/AAP
SA’s Jay Weatherill and the ACT were one vote short of a majority over the energy guarantee. Photograph: Mark Brake/AAP
Political editor

Last modified on Tue 13 Mar 2018 12.03 EDT

The government has secured agreement for further work to be carried out on the national energy guarantee despite resistance from South Australia and the ACT.

As flagged by Australia on Thursday, some of the Labor states wanted a detailed comparison with alternatives such as the chief scientist’s clean energy target and an emissions intensity trading scheme.

But at a meeting of energy ministers in Hobart on Friday the commonwealth, New South Wales, Victoria and Tasmania said further work should be undertaken without the side-by-side comparisons.

Jay Weatherill’s South Australian government and the ACT wanted the direct comparisons, but were outvoted. Queensland was not present at Friday’s meeting because the state is in caretaker mode ahead of Saturday’s state election. Western Australia and the Northern Territory were not represented as they are not part of the national electricity market.

The Turnbull government’s proposed national energy guarantee, unveiled last month, would impose new reliability and emissions reduction guarantees on energy retailers and large energy users from 2020.

A review of the national electricity market by Australia’s chief scientist, Alan Finkel, recommended a clean energy target for the electricity sector – but that recommendation was dumped by the government largely because of opposition within the Coalition.

Friday’s meeting agreed that the Energy Security Board would undertake work on the national energy guarantee only as directed by the energy ministers’ council within the Council of Australian Governments, with the detail of the scheme to be considered next April.

The meeting considering the nuts and bolts of the guarantee will therefore happen after the state election in South Australia, which is due in March. The Weatherill government has led the resistance to the guarantee on the basis the policy is not sufficiently friendly to renewables.

After Friday’s meeting, the South Australian energy minister, Tom Koutsantonis, told reporters that he and the ACT’s energy minister, Shane Rattenbury, had simply sought proof the national energy guarantee was the best policy option.

“We sought proof ... and they refused,” Koutsantonis said. He said the government’s refusal to benchmark the policy against viable alternatives indicated there was something to hide.

“Why are we choosing the third best option?”

Koutsantonis said South Australia and the ACT would proceed with their own modelling providing the direct comparison sought at the meeting.

Rattenbury said he was frustrated by the commonwealth’s position. “It is clear that the jurisdictions are lining up to push the national energy guarantee through, and we will need to work hard to make sure that the rules are designed in a way that does not freeze out renewables, and does not lock in coal.

“We need to make sure that does not happen.”

Koutsantonis said there was a schism in the energy council between coal states and states that wanted “to move forward with a real solution”.

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