08 March, 2017
Courtesy of the AFR
South Australian Premier Jay Weatherill says Prime Minister Malcolm Turnbull cannot ignore the groundswell in support for an emissions intensity scheme to bring down carbon emissions and provide stability in the National Electricity Market.
Mr Weatherill, who has accused the Turnbull government of demonising SA’s power mix which is dominated by renewables, said he had written to the Prime Minister to put an EIS on the agenda for the next Council of Australian Governments leader’s meeting.
It comes as some of Australia’s biggest energy producers and consumers, including BHP Billiton, EnergyAustralia, Origin Energy and the National Farmer’s Federation, have come out in support of an EIS.
“This is a tipping point – the Prime Minister can no longer ignore this growing list of industry, business and energy experts who all agree we need urgent action at a national level to fix our broken National Electricity Market,” Mr Weatherill said.
“Mr Turnbull needs to put the interests of all Australian businesses ahead of the interests of the shrinking pool of coal miners and generators operating in Australia. It’s time we had a serious debate about the merits of an EIS that is free of ideology.
“If the Prime Minister believes he is right and those businesses, scientists and economists that support an EIS are wrong he should be happy to make his case at the next COAG Leaders meeting.”
Energy Minister Josh Frydenberg, who will be appearing at The Australian Financial Review Business Summit in Sydney on Thursday, said an EIS was not on the agenda of the Coalition government.
“The government has made it clear we will not be adopting an EIS,” Mr Frydenberg told The Australian Financial Review.
Mr Frydenberg acknowledged the impact of rising electricity and gas prices which could worsen with the closure of French company Engie’s Hazelwood power station in Victoria later this month, with 1600 megawatts of power coming out of the NEM.
“The impact on both pricing and supply is significant and highlights the critical need to ensure sufficient baseload power in the system,” he said.
Modelling by the Australian Energy Market Commission and the Australian Energy Market Operator for the Finkel Review late last year found an EIS was the cheapest way to reach Australia’s carbon targets.
In its submission to the Finkel Review, the AEMC said there needed to be certainty over government policy to bring down carbon emissions.
“Mechanisms that drive emission outcomes in the NEM must align with energy policy objectives of reliable, secure supply at the best price for customers,” it said.
“The design of any emissions reduction mechanisms must be resilient to changes in market conditions and not depend on today’s expectations and assumptions. This will give investors and consumers confidence to invest and change behaviour.”
South Australian Senator Nick Xenophon, who had previously proposed an EIS to federal parliament, said high power prices was becoming a national crisis that had to be dealt with before other priorities such as company tax cuts.
“We need to sort out the power crunch first. If South Australia’s power prices are 50 to 80 per cent higher than other states. Power prices is reaching a crisis point,” Senator Xenophon told the the Financial Review Business Summit on Wednesday.
“Before I sit down and talk to the government on tax cuts, there has to be some movement on power prices.”