Federal Energy Minister Josh Frydenberg speaks at the Australian Financial Review National Energy Summit in Sydney yesterday.
Federal Energy Minister Josh Frydenberg speaks at the Australian Financial Review National Energy Summit in Sydney yesterday. DEAN LEWINS

Govt fails to come clean on energy

THE Turnbull government has given the strongest indication yet it will not put in place a Clean Energy Target, as the cost of renewable energy falls and it embarks on other major reforms to the electricity market.

Energy Minister Josh Frydenberg said yesterday emissions from the energy industry had already fallen in the past two quarters after the closure of coal-fired power stations and flatlining demand”.

"However, this transition to lower emissions cannot come at the expense of the reliability and affordability of our electricity system,” Mr Frydenberg told the National Energy Summit in Sydney.

"Should reliability and affordability be compromised, public support for tackling climate change will quickly diminish and previous gains lost.”

The CET is one of 50 recommendations handed to the government by Chief Scientist Alan Finkel and intended to fix energy security, affordability and reliability issues. It would extend a scheme similar to the current Renewable Energy Target by pricing different types of electricity generation based on their carbon emissions.

The government has already adopted the other 49 recommendations, but many Coalition MPs are opposed to a CET, with the Nationals passing a motion at their federal conference last month demanding any such scheme not go ahead.

Former resources minister Matt Canavan has also called for the government to phase out billions of dollars in renewable energy subsidies.

However, major corporations including BHP are backing a CET.

But Mr Frydenberg said the cost of renewable energy was falling already without any CET in place.

"It is against this backdrop of a declining cost curve for renewables and storage, greater efficiencies that can be found in thermal generation and the need for sufficient dispatchable power in the system that we are considering the Finkel Review's 50th recommendation to which we'll respond before the end of the year,” he said.

"Globally in the past seven years, the cost of wind- powered generation has more than halved. Domestically, solar PV costs have dropped more than 50%.

"By 2020, costs of battery technologies are expected to fall 40-60% and over 70% to 2030.”

Opposition Leader Bill Shorten renewed Labor's commitment to a 50% renewable energy target after Mr Frydenberg all but ruled out proceeding with it.

Speaking at the summit, Mr Shorten said he was troubled by reports that because of opposition to renewable energy on the Coalition backbench, Prime Minister Malcolm Turnbull was poised to give up on a clean energy target.

"Walking away is the worst possible option. It would leave investors in the lurch, sentence business to more uncertainty, more chopping and changing,” he said.

"It would make Australia's job harder to reduce emissions.

"If Turnbull caves in to Tony Abbott and a handful, a rump of conservative backbenchers and walks away from a clean energy target, it will mean continued higher prices for Australian families and Australian industry.”