August 14, 2018






SUBJECT: National Energy Guarantee (NEG)


GARTH RUSSELL (PRESENTER): Well the Government's back bench on Energy, last night, endorsed the Coalitions plan for a National Energy Guarantee or NEG, as has been coined the phrase, after a two hour cabinet briefing. Now this is a positive sign for the Prime Minister ahead of the party rooms meeting today. 7 committee members voted in favour of the policy and former Prime Minister, Tony Abbott voted against it. With it likely that NEG will be introduced to parliament at some stage this week we wanted to catch up with Pat Conroy MP, Member for Shortland and Shadow Assistant Minister for Climate Change and Energy. Pat Conroy, Good morning. Thanks for talking to us.


PAT CONROY: Good morning.


RUSSELL: So, just overall, what does Labor think of the National Energy Agreement at this stage?


CONROY: We are open to it, for a key reason which is we have had 5 years of energy policy chaos in Canberra since this government abolished Labor's emission trading scheme and that's meant that we have had a lot of older power stations close down and no new power stations opened up. And that has meant that we have seen wholesale energy prices double in the last 5 years because of the policy uncertainty so we do need to end the political knife fight in Canberra, so we are open to it. For us the key thing is that it has to be able to be scaleable to a reasonable emissions reduction target. At the moment, the Government’s own modelling shows that we will hit 24% reduction in emissions in the electricity sector next year before the NEG even starts. So, for the entire decade between 2020-2030 the NEG will only drive a 2% reduction in emissions in the electricity sector and that's the equivalent of building four wind turbines in the decade. 4 wind turbines. We are putting in more than that a week at the moment. 


RUSSELL: So for the average person listening to this, obviously you have your head around this much more than many others, how specific can the modelling be to project these figures? 


CONROY: Well the modelling can be specific in terms of looking at trajectories in the area of emissions reductions and what that will drive in terms of renewable energy and that's really important because not only do we need to satisfy and play our part in the international efforts to cut carbon emissions, more renewable energy will actually drive down power prices and so it's actually a win win for people. If we get a NEG that has a proper ambitious emissions reduction target such as what Labor is proposing, which is at least 45% against 2000 levels, that will drive more renewable energy investment into the economy and that will drive down electricity prices because renewable energy is the cheapest form of new power generation.


RUSSELL: So as far as the coalition's modelling, I know that both Labor and the Greens want to see more details, is that going to help the cause to get this across the line?


CONROY: Well I think it will to some extent. Josh Frydenburg, the Minister is saying that the NEG will lead to $550 of reductions in power prices. He almost always forgets to say that $400 of the $550 isn't due to the NEG, it's due to the last couple of years of Labor's Renewable Energy Target driving waves of investment in wind and solar. The NEG as currently constituted will only provide a saving of up to $150 a year for consumers. Interestingly RepuTex, which is the premier private modelling outfit have modelled Labor’s higher target and that has said that will increase savings by 25%. Releasing the Government’s modelling will be useful, but the headlines figure show it will drive basically no new investment in renewable energy, which is a major stumbling block.


RUSSELL: Just how set in stone is something like this going to be given the fact, as I’m sure you’d be happy to acknowledge there could be a change of Government at any time. I mean we’re talking sort of a long time ahead, we’re talking planning sort of decades ahead. How set in stone is this legislation?


CONROY: Well no Parliament can bind future parliaments. That’s a fundamental premise of parliamentary democracy. But the really important thing is if we can get bi-partisan commitment to a specific energy policy framework. So I held, I was Deputy Chair of the House Energy Committee, a big enquiry into modernising the grid last year and I asked every single large energy company, every single academic, what is the key thing to remove the uncertainty at the moment? And they said, have Labor and Liberals agree on the framework. They can disagree on the target, but they have to agree on the same policy framework. So if hypothetically we got a NEG up that could be scaled up, investment would flow to the sector, industry would basically take account of the fact that the Government has a 26% target, and Labor has a 45% target and as long as there’s a reasonable notice period, they would hedge their investments, to make sure it would make money for them under any scenario. So the key thing is removing any policy uncertainty, that a new Government would just come in and wipe the board clean and start with an entirely new mechanism. The key thing is the mechanism is agreed to by both sides of Parliament, and then people can have different targets, as long as the framework is the same.


RUSSELL: So business groups, industry groups, children, young people who have a vested interest in our future of the ecology and the environment want something decided. What are your thoughts, what do you think the chances are that the policy can be kept out of this and that some decision can be made sooner rather than later to get this across the line?


CONROY: I’d love politics to be taken out of energy policy, it’s been a cancer on the national political environment for the last ten years. Sadly that hasn’t happened so far, and we’ve just seen there is some rear guard action by Mr Abbott and Mr Joyce in the Liberal party room. But to even get it this far, Mr Turnbull has had to make so many concessions around an inadequate target and basically making it very hard for Labor to increase the ambition if we win Government. So it’s very hard to remove the politics. I understand people’s frustration. When you look at other comparable countries around the world, whether it’s the United Kingdom or Germany, all sides of Parliament have the same climate goals, the same energy policy, and that means energy investment is flowing into those countries, they’re de-carbonising their economies in a responsible way, without this political knife fight, this knife fight that is costing people money right now. As I said, five years of policy uncertainty at a federal level has led to a doubling of wholesale energy prices, and that’s got to end.


RUSSELL:  Appreciate your time this morning, thanks for talking to us.


CONROY: Not a problem, have a great morning.


RUSSELL: That’s Pat Conroy MP, Member for Shortland, Shadow Assistant Minister for Climate Change and Energy, and as I said, that discussion is being played out in the Coalition party room as we speak, well certainly today.