Prospects for a CET fading under Coalition

The prospects for a decision by the Federal Government to introduce a Clean Energy Target by the end of the year are fading following a speech delivered this week by the Minister for the Environment and Energy, Josh Frydenberg, at the Australian Financial Review's National Energy Summit.

Mr Frydenberg highlighted the “declining cost curve” for renewable energy and storage as the background against which a decision on the CET will be made, suggesting that lower costs for renewables would make any market intervention unnecessary.

Mr Frydenberg emphasised the central importance of energy reliability and affordability, suggesting that public support for climate change would quickly diminish if they are compromised.

Recent comments by the Prime Minister, Malcolm Turnbull, have reinforced speculation that a forthcoming energy policy will be focused on reliability and affordability at the expense of sustainability and emissions reduction.

At the same conference, Dr Alan Finkel argued strongly for his complete package including the CET as a mechanism for solving the energy crisis and making the transition from fossil fuels to renewables.

He said that the CET would remain a useful tool in managing the transition even if there were an “extreme rate of reduction in the price of new technologies.”

Opposition Leader Bill Shorten said that Labor was willing to work with the Coalition Government to negotiate a Clean Energy Target. He said that, in spite of conservatives who he believed would never vote for a CET, “Labor has 69 votes in the House of Representatives – and we are ready to vote for a clean energy target.”

Mr Shorten said that a Labor government would overhaul National Energy Market rules on renewable energy investment thresholds to encourage more investment in electricity storage projects and improve outcomes for households that sell power back to the grid.

Labor would also create Renewable Energy Zones in line with the Finkel recommendations, based on local resources, topography and developer interest to drive renewable projects; and it would free up the Clean Energy Finance Corporation to invest in more generation and storage by restoring its return benchmark to original levels.

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