The Greens are calling on the government to release the full modelling for the proposed final design of the National Energy Guarantee to enable scrutiny of the government’s claim that it will result in lower emissions and power bills.
“The government has only produced a spreadsheet and chart pack, which really doesn’t cut it,” said Adam Bandt.
And there are probably good reasons for not releasing the full modelling carried out by ACIL Allen Consulting considering this article written by Owen Kelp, a principal of the firm who “has previously undertaken electricity sector emission projections for the Department of the Environment and Energy and commonly undertakes electricity market projections for governments and market participants.”
Kelp writes; “There is no identified shortfall in capacity over the coming decade even with the closure of Liddell and AEMO’s own analysis supports this view. Given that the NEG Reliability Obligation is designed only to be triggered in the event of an identified shortfall of dispatchable capacity, then this measure is likely to result in nothing more than administrative overhead for the industry and consumers will bear an additional, unnecessary cost.”
Of more interest to Kelp was the NEG emissions obligation.
“The electricity market modelling that was undertaken for the ESB utilised an emissions budget of 1,352 Mt CO2 for the NEM over the period 2020-21 to 2029-30, the period covering the Paris Agreement. This represents a very small reduction over doing nothing as the Business as Usual (BAU) scenario modelled had emissions of around 1,396 Mt CO2 over the same period. Therefore, the NEG is only seeking to achieve abatement of around 44 Mt CO2-e over a 10-year period.
Reviewing the Department of Environment and Energy’s latest emission projections report reveals that the cumulative abatement target for Australia for the period 2020-21 to 2029-30 is assessed to be 868 Mt CO2 (down from 990 Mt CO2 in 2016) to meet a 26 percent reduction on 2005 levels by 2030.
Given that the electricity sector accounts for around one-third of national emissions, it must be asked why the Government is only seeking to achieve 5 percent of the required abatement from the National Electricity Market? If the ESB modelling is in accord with current Government policy, it appears that the Government is walking away from undertaking any meaningful abatement in electricity in the post-2020 period. If this is the case, it will burden the other sectors of the economy to do the heavy lifting.
Achieving abatement in some of these other sectors is extremely challenging and potentially very expensive.
An emissions budget for the NEM of 1,352 Mt CO2 is far too generous and puts too much reliance on other sectors which will likely increase the aggregate cost of meeting our 26% target. The NEM budget should be revised down to around 1,214 Mt CO2 for the emissions obligation of the NEG to make a proportionate contribution.
This approach is the absolute minimum abatement task which should be applied to the NEM as it is likely to be lower cost abatement than other sectors. Decarbonisation of electricity is likely to be a precursor for decarbonisation of other sectors, especially transport where the shift to electric vehicles to reduce transport emissions requires electrical energy from low to zero emissions sources.”
It would be very interesting to see if Mr Kelp expressed the same view to the government when they were paying him for it. Then again, I suppose that depends on what questions they asked.
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