The NEG is a con that will deliver neither lower prices or cleaner energy

By Jim Hayes

A lot of people are talking about the National energy Guarantee (NEG). As Malcolm Turnbull and his government pursue it, the opposition grows.

On the one hand, there are those on who share Tony Abbott’s view of the world, and see even a minimal relaxation of the pro coal policy as a sellout. As we saw, this brought some dissention into the Liberal Party room.

Then there is the much bigger number who regard the NEG as a betrayal of the government’s responsibility to act appropriately on the threat of global warming and turn to alternative clean energy.

As the debate This debate unfolded, an unprecedented heat wave in the northern hemisphere was actually killing people and a large part of Australia was suffering from drought again. Findings from the Bureau of Meteorology, the CSIRO,  and other scientific bodies, makes it clear that more frequent and severe droughts, bushfires and floods are the consequence of rising global temperatures in australia are linked to a warming climate. Over the longer term, the southern half of our continent is drying up.

You would think that everyone would get the hint. But not so. Some have an amazing ability to not see what they don’t want to see.

If truth is told, the NEG was hatched up as an intended publicity stunt, to win the government some much needed credibility.

Australia wants much more done to lower carbon emissions and a decisive shift to renewable energy. The idea is to make a show of working towards cleaner electricity. Never mind that the proposed target of a 26 percent reduction is not enough to even meet the government’s existing Paris commitment, that it is based on continuing to boost rely on coal generation and investment on renewables is slashed. Few are being fooled by the pretence that the NEG is a genuine emissions reductions policy.

The other claim is that implementation of the NEC will lead to lower electricity prices. No, it won’t, because the claim is made on the back of pretending that high prices are caused by supply problems.

Australia’s high energy prices are the result of the National Electricity Market, which is designed not only to privatise generation and distribution but allows the private providers to milk the system, by using the wholesale spot market, to sell at the highest price. The premium is passed down to the consumer.

Victoria, where the privatisation of electricity has gone further than anywhere else, suffers from the highest prices, under this market and the generous government additional subsidies and additional charges allowed under the privatisation contracts. In the last year alone power bills have gone up by 20 percent, while AGL pocketed $1 billion and Energy Australia tripled its own profit.

The NEG is not going to change the existing electricity market and power bills are not going to go down because of it.

And another thing. Renewables are now much cheaper than coal. Shifting to them would be a good start to reducing what Australians must pay.

If the deregulation and privatisation of recent times are reversed, and the existing predatory market is replaced by a distribution system that works for the consumer and does away with the middle man, prices will fall even further.

 

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