The NEG causing controversy in Parliament’s first week back

Politicians returned to Canberra this week and the National Energy Guarantee (NEG) was the hottest item on the agenda.

The NEG framework has been developed to solve Australia’s energy policy crisis. Specifically, the NEG seeks to address the trilemma of affordability, reliability and emissions reduction.

Last week, the Council of Australian Governments (COAG) energy ministers gave the green light to the Commonwealth Government to continue to progress the NEG framework.

Following, this week the Coalition party room endorsed the NEG. However, the endorsement did not come without some resistance from recalcitrant Government members.

The yet-to-be-convinced members say the framework is too focused on lowering emissions and not enough on reducing electricity costs.

On the contrary, the Labor Opposition say the framework doesn’t go far enough in tackling emissions, calling for the 2030 target for the electricity sector to be increased from 26 per cent to 45 per cent.

Regardless, next week the Government will push on and introduce the enabling legislation into the House of Representatives.

The Coalition needs Labor’s support to pass the Bill if a number of Coalition members vote exercise their right to cross the floor.

Solar panels being installed on a farm
Next week will be a crucial test for the National Energy Guarantee

About the NEG

The NEG framework aims to solve the trilemma of affordability, reliability and emissions reduction with a focus on ensuring:

  • the reliability of the system is maintained, meaning all Australians can turn on their electricity whenever it’s needed,
  • Australia meets our international emissions reduction obligations set out in the Paris Agreement to achieve a 26% reduction in carbon emissions by 2030 and
  • that the above objectives are met at the lowest overall costs, with the Government promising household savings of $550 per year by 2030.

According to the Government, the NEG is designed to “encourage new investment in clean and low emissions technologies while allowing the electricity system to continue to operate reliably.”

The National Farmers’ Federation on the NEG

Australia’s electricity market is broken. Fruit and vegetable growers, sugarcane producers, irrigators and dairy farmers are contending with, in some cases, power price rises of up to 200%.

Wholesale price hikes and outages can destroy annual returns for some farmers in the space of a few hours.

The National Farmers’ Federation (NFF), in principle, supports the NEG framework’s ability to deliver the farm sector an affordable, reliable and towards reduced emissions energy supply — without preferencing any one energy source.

Agriculture accounts for 13% of Australia’s economy-wide emissions, behind transport at 19% and electricity generation at 35%.

The NFF recognises the role of Australian agriculture in lowering the economy’s overall emissions. Agriculture also has a role to play in emissions offsets through soil and vegetative carbon sequestration.

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Andrea Martinello

Andrea Martinello

Andrea is the Community & Engagement Officer at the National Farmers' Federation.

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