The Turnbull government’s proposed National Energy Guarantee would have little or no impact on cutting the emissions of the electricity sector, a report says.
State and territory ministers will discuss in August the final design of the NEG, which the federal government says will bring down power prices, improve the reliability of the electricity system and cut carbon emissions.
However a report by the Australia Institute shows the industry is already well on track to meet the NEG emissions cut target of 26 per cent on 2005 levels by 2030 without the policy in place.
Dr Hugh Saddler’s report found wind and solar generators now under construction or committed to being built will reduce NEM carbon emissions to within 5 Mt of the 129 Mt target by 2020-21.
“This leaves emissions reduction of less than four per cent to be achieved by 2030,” he wrote.
In the absence of a more ambitious target, the wind and solar energy industry could collapse after 2021, he said.
Labor spokesman Mark Butler said the electricity sector wants to do more to reduce carbon emissions but the NEG will severely limit this.
“It will simply shift the emissions reduction responsibility to other sectors of the economy that don’t have a low-cost technology available to them,” he said.
Sectors such as transport and mining face drastic cuts if Australia is to meet its Paris Agreement target.
Dr Saddler said the emissions reductions to date were good news.
“But it begs the question of ‘What next?’ Are we really going to see no emissions reduction from the electricity sector for almost a decade?” he said.
“Letting the electricity sector off lightly means tougher targets for other industries. Agriculture, manufacturing and transport have much further to go at much greater cost than electricity.”
Meanwhile, Energy Minister Josh Frydenberg flaunted Australia’s leading global status when it came to rooftop solar and storage.
Australia led the world during 2017 in the installation of residential batteries, a report released by Australia’s chief scientist, Alan Finkel, found on Friday.
The report finds falling home battery system costs, peaking interest in pumped hydro storage, with Australia placed to lead in exporting renewable hydrogen.
“As more renewable energy … enters our electricity grid, the need for energy storage solutions grows,” Mr Frydenberg said.
“Going forward, the National Energy Guarantee will require energy retailers to ensure they have sufficient reliable energy, including storage.”