Australia

QLD and Vic back energy plan for now

A wind farm amongst electricity pylons Source: AAP

Federal government frontbenchers are confident the NEG has partyroom support as Queensland and Victoria signal they will withdraw their support if it doesn't

Energy ministers have reached a compromise on the Turnbull government's signature energy plan in a decision the policy architect says is a "great step forward".

Draft state legislation for the implementation of the National Energy Guarantee could be released for public consultation as early as next week.

State and territory energy ministers agreed at a meeting on Sydney on Friday that the consultation period would kick off if the policy makes it through the coalition party room at a meeting in Canberra next Tuesday.

The final decision will be made by state and territory ministers in a teleconference after the meeting.

But the Labor governments of Victoria and Queensland have made it clear they won't support legislation that doesn't have the support of the Coalition party room.

"I want to say from the outset that Victoria has not signed up to the National Energy Guarantee," Victorian minister Lily D'Ambrosio told journalists after the meeting on Friday.

"We will continue the process of working through the design of the National Energy Guarantee, and that there would be an opportunity, of course, for the Federal Government to pursue their federal legislation through their partyroom."

Queensland's acting energy minister Cameron Dick also approached the NEG cautiously.

"The greatest threat to energy prices and stability in this country is the Coalition party room."

"We want to make sure the climate denialists and political extremists in the Coalition do not damage where our nation needs to go."

Frontbenchers confident Coalition will approve the NEG

After the meeting, the Energy Minister Josh Frydenberg told reporters the NEG had the support of the Coalition.

"I know there's strong support for the National Energy Guarantee," he said.

"Without the National Energy Guarantee, there would be a heightened risk of blackouts and no Labor government should deliver more black-outs and higher prices for their communities."

The Resources Minister and Nationals MP Matt Canavan appeared alongside the Energy Minister.

"I'm confident we'll rally around this solution, because it's a solution to bring power prices down and that's the shared objective of every Coalition member in Canberra," he said.

Energy Security Board chairwoman Kerry Schott, who helped design the policy, told the meeting the result was "a great step forward".

The draft legislation would implement changes to the National Electricity Law and must be passed by the South Australian parliament for the guarantee's reliability requirements to come into effect.

Minister for Energy Josh Frydenberg with state and territory energy ministers during a COAG meeting to discuss the National Energy Guarantee (NEG) at the Shangri La Hotel in Sydney, Friday, August 10, 2018. (AAP Image/Mick Tsikas) NO ARCHIVING
Energy Minister Josh Frydenberg with state and territory energy ministers during a COAG meeting to discuss the National Energy Guarantee (NEG) in Sydney.
AAP

It, and federal legislation to set the target for emissions reduction in the electricity sector, must undergo four weeks of public consultation before parliament can consider it.

Heading into the day-long meeting, federal energy minister Josh Frydenberg said the responsibility of ministers was to provide an energy solution for the future.

"Australian eyes are on this room today and what happens here matters around every Australian kitchen table and every Australian factory floor," he said.

Prime Minister Malcolm Turnbull was confident of a result after Tuesday's meeting.

"We have a discussion and the party room makes decisions by consensus. There is very strong support for the National Energy Guarantee,' he said.

Labor leader Bill Shorten told journalists in Queensland he was hesitant about the NEG's prospects.

"I'm worried this is more hot air than lower prices. It's the entree really to the main meal which is next week," he said.

"If it has more renewable energy, Labor likes it. If it has less renewable energy, then Labor is not for it."

Labor energy spokesman Mark Butler said if and when legislation came before federal parliament Labor would continue its push for a higher 45 per cent emissions reduction target.

The NEG centres on 26 to 28 per cent targeted reduction on 2005 level greenhouse gas emissions by 2030.

At the same time, the aim is to ensure energy supply is reliable and electricity retailers invest in dispatchable energy sources, with the greater supply driving down prices.

Dr Schott warned on Thursday that if an agreement wasn't reached in the next week or so the opportunity for a NEG was "probably gone".

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