Government support of new coal-fired power stations would undermine price benefits of NEG: new report
The Australia Institute has released new analysis by Chief Economist Dr. Richard Denniss showing that the purported $150 price reduction likely to flow from the NEG will be rendered meaningless if the government proceeds with new policies to adjust future electricity supply via the so-called ‘NEG plus’.
“The NEG modelling concludes power prices will be lower largely because 'certainty' would see interest rates 3% lower for electricity sector investors,” said Dr. Richard Denniss, chief economist at The Australia Institute.
“Yet the very fact that the Turnbull Government is now publicly considering new policy measures to encourage additional coal fired electricity generation destroys any of the 'certainty' that the NEG was supposed to provide investors with.
“While the NEG modelling assumes policy stability over decades it seems the Turnbull Government isn’t even committed to policy certainty for weeks.
"This means that the claimed price reductions in the ESB modelling are already virtually meaningless.
“The ESB modelling results would also be rendered meaningless if the Turnbull Government, or any future government, sought to introduce policies to encourage greater competition – or more ambitious emissions reductions – into the electricity industry.
"Australia needs a much higher emissions target to be seen as doing our fair share. The world's climate negotiators know this and Australia's energy investors know this.
"The only certainty around energy and climate policy in Australia is ongoing uncertainty."