On 15 August, at the request of the COAG Energy Council, the Energy Security Board (ESB) released a draft Bill that would implement the National Energy Guarantee (NEG), available here. Since the draft Bill was presented for consultation, there have been significant developments in relation to the policy of the Commonwealth Government. These include comments to the effect that the Government will not proceed with the NEG, but will proceed with some element of the reliability guarantee.
While these developments create significant uncertainty for energy market participants, the underlying issues that the NEG was looking to address have not disappeared. We therefore consider it useful at this time to reiterate the requirement for long-term policy settings to address climate change, maintain system reliability and security, and place downward pressure on wholesale prices by increasing supply and stabilising long-term investment signals.
Our submission reiterates that a long-term approach to energy policy that includes a trajectory on reducing emissions from the generation of electricity is critical in driving down prices for customers, and that a do-nothing policy creates a worse outcome for the sector. While the status of the draft Bill remains uncertain, in the interim, we remain committed to supporting policy that provides clear long-term investment signals for the electricity sector in terms of expected commitments to reduce emissions. Where this trajectory may produce unintended consequences, for example, in terms of system reliability, we support further reform that is targeted to balance the outcomes required, but not at the expense of the principal aims of providing investment certainty within a long-term aim of decarbonisation, and not at any undue cost to customers.
AGL made a submission in response to the Consultation on the draft Bill outlining these points, a copy of which is available here.