No resolution on energy after COAG meeting, but Government remains confident in National Energy Guarantee

Headshot of Josh Frydenberg

The Federal Government has managed to fend off an attempt by some Labor states to derail its new energy policy.

Key points:

  • SA, ACT both pushed back against National Energy Guarantee, asking Federal Government to consider costing other options
  • Josh Frydenberg was joined by ministers from Vic, Tas, NSW in voting against that
  • Energy ministers won’t meet again to discuss policy until April

But energy ministers will not meet to discuss how to structure the Coalition’s National Energy Guarantee (NEG) for five months, which means a national agreement on energy is still several months away.

South Australia and the Australian Capital Territory have been leading the charge against the NEG, arguing it would hurt the renewable energy industry without helping drive down power prices.

Both states used an energy ministers’ meeting in Hobart on Friday morning to push for more modelling to be done on other energy policies, including the Clean Energy Target championed by Chief Scientist Alan Finkel.

But they were voted down by Federal Energy Minister Josh Frydenberg, along with ministers from Victoria, New South Wales and Tasmania.

Prime Minister Malcolm Turnbull was quick to claim the result as a victory for the Government.

“I want to congratulate Josh and the energy ministers. They’ve resisted the temptation to play politics with this,” Mr Turnbull said.

Mr Frydenberg said the NEG was now much closer to becoming a reality.

“South Australia and ACT took a stand today, and they were defeated,” he said.

“The message from that is that the Commonwealth and the other states see the National Energy Guarantee as the only game in town.”

The Government said it would now push ahead and do more detailed modelling on how the NEG would work.

Industry groups and NGOs have been calling for the states and the Commonwealth to deliver certainty on energy policy as quickly as possible — but energy ministers will not meet again to discuss the policy until April next year.

States trade barbs over disagreement

South Australia’s Energy Minister Tom Koutsantonis hit out at the states who rejected his pitch.

“The coal-dependent states are sticking together and the states that want to move forward with a real solution are sticking together,” Mr Koutsantonis said.

The Greens have also lashed out at Victorian Premier Daniel Andrews after his Energy Minister voted against South Australia and the ACT.

“Daniel Andrews has betrayed renewables by backing in the coal-huggers at COAG. He has sold his soul to coal,” Greens MP Adam Bandt said.

“Despite knowing that the NEG will strangle investment in renewables and prop up dirty coal, Andrews has shown his true colours and capitulated at the last minute.”

Mr Koutsantonis said the Federal Government was only resisting his push to model other policies because they knew the NEG was deeply flawed.

“Let’s have an honest debate here — if the NEG is so good, why are you so afraid to model the CET and the EIS alongside it? What have you got to lose? Is it maybe perhaps that those two other models turn out to be better and cheaper?” he said.

“What is the intellectual argument for that other than it’s the only thing that Josh Frydenberg can get through his party room?”

He said in the end the Coalition would still need to secure the support of his state and the ACT if they wanted to make the NEG work.

But Mr Frydenberg played down the prospect of a split.

“What I do know is today was a big step forward, and that the South Australian and the ACT Government have decided to put an official within the system to work with the other states and the Commonwealth on the design of the National Energy Guarantee,” he said.

“That is a positive step forward. They had their say today and they lost.”