COAG to decide final direction of NEG today

The Council of Australian Governments (COAG) Energy Council, comprising state and territory energy ministers, headed by Federal Energy Minister Josh Frydenberg, is meeting today to decide whether the proposed National Energy Guarantee (NEG) proceeds to a final policy design in August or not.

Proposed by the Energy Security Board in October 2017, the National Energy Guarantee looks to encourage new investment in clean and low emissions technologies while allowing the electricity system to continue to operate reliably.

To deliver this transition, the Guarantee requires retailers to contract with or invest in generators or demand response to meet a minimum level of dispatchable ‘on demand’ electricity where there is an identified gap. Retailers must also keep their emissions below an agreed level.


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Australia has set a goal of cutting emissions from the main power grid serving eastern Australia – the National Electricity Market – by 26 per cent from the levels in 2005 by 2030, roughly proportional to the overall target pledged in Paris in late 2015.

The Energy Security Board said last year the NEG would lower wholesale prices by 20 per cent to 25 per cent a year between 2020 and 2030 and residential bills will go down “in the order of” $100 to $115 per year.

But critics of the proposal, such as Green Energy Markets, a consultancy, argue that the NEG target implies a renewable energy contribution by 2030 that is less than is possible by 2020.

Victoria, Queensland and the ACT insist they won’t compromise on their renewable targets, arguing that their extra work should be used to elevate Australia’s target, and not used as an excuse for others, namely NSW, to do less.

The Queensland government is pursuing a 50 per cent renewable target by 2030, while the ACT is targeting 100 per cent renewables by 2020. Victoria is heading for 25 per cent by 2020 and 40 per cent by 2025.