States and ACT move on clean energy target


The policy vacuum on climate change at the Federal level was highlighted at Friday's COAG Energy Council meeting by the failure of the Federal Environment and Energy Minister, Josh Frydenberg, to agree to take steps to set a national clean energy target in line with recommendations of the Finkel Review.

The Finkel Review recommended the implementation of a Clean Energy Target (CET), finding it would drive down power prices, increase reliability and lower carbon emissions. The CET would require retailers to purchase a certain amount of power from clean generators, such as renewables and gas, thereby incentivising new investment in the market.

With the failure of the Federal Energy Minister to endorse the recommendation, it was left to four jurisdictions – Queensland, Victoria, South Australia and the ACT – to join forces in requesting the AEMC to develop design options for implementation of a Clean Energy Target.

Each of these jurisdictions has set for themselves the target of zero net emissions by 2050, and other clean energy targets in the interim.

The COAG Energy Council meeting followed the signing on Thursday by the four jurisdictions of a Climate Leadership Declaration jointly with former US Vice-President and current Chair of The Climate Reality Project, Al Gore. The Declaration showcases climate change mitigation efforts in each jurisdiction, and reaffirms support for Australia’s ratification and implementation of the Paris Climate Agreement.

The premiers and chief ministers of the four jurisdictions will meet later this year to agree to priorities and actions for collaboration on climate change.

Speaking with reporters after the meeting, Minister Frydenberg said that while the Finkel recommendation for a Clean Energy Target was important, the government was not ready to commit to it

Other recommendations of the Finkel review were adopted at the COAG Energy Council meeting, including:

  • A new Generator Reliability Obligation which will require intermittent sources of generation to provide an appropriate level of backup to guard against blackouts;

  • The introduction of Energy Security Obligations to provide the necessary support services (Frequency Control and Ancillary Services and inertia) to intermittent sources of generation;

  • A new requirement for large generators to give a minimum three years notice before closing; and

  • The establishment of an Energy Security Board to oversee the health, security and reliability of the NEM.

South Australia's Treasurer Tom Koutsantonis said it was “incredibly frustrating that despite the overwhelming community support for a market mechanism, the Federal Government is still resisting committing to all 50 Finkel recommendations”.

“The Finkel Review is a package of 50 actions and should be treated as such.

“The Federal Government’s own Chief Scientist found that a CET would lower prices, improve system security and help Australia meet its carbon reduction commitments.

“But opposition from the coal lobby and the right wing of his party is preventing the Prime Minister from acting in the interests of all Australians.

“Australians can’t wait any longer, which is why four Australian states and territories have today tasked the Australian Energy Market Commission to design options for a CET that could be implemented by the states.”

The Communique of the meeting is available here.

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