“The National Energy Guarantee (NEG) will impose substantial and irreparable economic damage without delivering a discernible environmental benefit. It is not in Australia’s national interest and should not be implemented,” said Daniel Wild, Research Fellow at the free market think tank the Institute of Public Affairs.
An IPA research brief, distributed today to all federal parliamentarians, finds that every government policy which has supported wind and solar energy generation over the last two decades has coincided with large increases to electricity prices.
“The government should dump the NEG, withdraw from the Paris Climate Accord, and just focus on cutting electricity prices and improving reliability.
“The NEG is functionally equivalent to the Renewable Energy Target, an Emissions Trading Scheme, an Emissions Intensity Scheme, and a carbon tax. It uses government regulation to support weather-dependent energy generators, such as wind and solar, at the expense of coal.
“Under the NEG, energy retailers could face a $100 million fine for not meeting their emissions reductions requirements, but just as little as a $1 million fine for not meeting their reliability requirements. This means the government is favouring emissions reductions over reliability by a factor of 100-to-one.”
“The goals of reducing electricity prices and carbon emissions at the same time are contradictory. The emissions reduction component will mean that energy retailers will be forced to acquire energy from higher-cost sources than what would otherwise be the case,” said Mr Wild.