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State targets make energy plan immaterial

State governments are already driving enough investment in solar and wind power to cut the electricity sector’s emissions by more than the Turnbull government wants, rendering its new energy policy near-useless.

Energy analysts RepuTex say the effect of state renewable energy targets, especially in Victoria and Queensland, means the proposed national energy guarantee will have a negligible impact on the market.

It says the “do nothing” scenario modelled for the Commonwealth understates the investment in renewables because it doesn’t take into account state government targets despite assurances they will remain.

Queensland is aiming for 50 per cent renewables by 2030 while Victoria has legislated to reach 40 per cent by 2025 and South Australia has already nearly met its 50 per cent target.

This means the modelling from the government’s advisory Energy Security Board starts with a higher baseline of emissions against which to measure the impact of the national energy guarantee.

Australia has committed under the Paris Agreement to cut its overall emissions by 26-28 per cent on 2005 levels by 2030, and the federal government has anticipated applying this cut equally across all sectors.

The board’s model predicts the electricity sector will cut its emissions by 19 per cent by 2030 without the new national energy guarantee.

But RepuTex’s own modelling, released on Monday, says once you incorporate existing state renewable energy targets, emissions from the electricity sector will actually drop 29 per cent.

It says this renders the national energy guarantee, details of which are due to be finalised by energy ministers in April, “immaterial” to the market.

“Unless the target is more ambitious than where emissions are projected to be without the NEG, there is little need for the administrative complexity of the scheme,” RepuTex associate research director Bret Harper said.

Already, state targets have driven investment in renewables fast enough that three times more new generation will join the system by mid-2018 than the ESB predicted.

“The arms race between the states for renewable investment is well under way, with or without the NEG,” Mr Harper said.

And state targets will stay the dominant signal for new generation unless the emissions cuts under the NEG is lifted.

Many say electricity generation should bear a heavier load of reducing Australia’s emissions because it’s one of the easiest areas to make changes and it can drive faster cuts in other sectors, such as transport, once they become more reliant on electrical power.


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