Australia plans to ditch its clean energy target aimed at curbing greenhouse gas emissions in favour of coal power generation, in a scheme that echoes US President Donald Trump’s energy policies.
Under a proposal announced on Tuesday, energy companies in Australia must deliver a certain level of dispatchable power from ready-to-use sources such as coal, gas, hydro or batteries.
Canberra would also phase out subsidies for renewable energy from 2020 in a move that critics warn could dent its ability to meet its emissions reduction targets under the Paris climate agreement.
“Past energy plans have subsidised some industries, punished others and slugged consumers,” said Malcolm Turnbull, prime minister. “Our plan has no subsidies, no certificates and no tax.”
Bruce Mountain, director at Carbon and Energy Markets, an economics consultancy focusing on energy markets, said Australia’s plan “looks like a carbon copy of the new Trump energy policy in the US as it would likely mandate energy retailers to purchase electricity from coal-fired generators”.
Mr Mountain added that other sectors of the economy would have to shoulder more of the emissions reduction burden if Australia was to meet its Paris goal of reducing emissions by between 26-28 per cent on 2005 levels by 2030.
Earlier this year Mr Trump announced measures to put fracking, nuclear power and coal exports at the heart of the US energy sector. The Trump administration has also proposed a new payments system available only to coal and nuclear power plants to help shield them from competition from lower cost gas and renewables.
Energy and climate policies have long been a political conflict zone in Australia, which is the world’s biggest coal exporter and relies on the fuel for more than half its electricity generation. In 2014 it became the first country to repeal a carbon tax — a move that has prompted a rise in emissions.
Australia’s policy shift follows months of internal wrangling within the ruling coalition over a proposal for a clean energy target made by the country’s chief scientist.
But under pressure from climate sceptic conservatives in his party, including arch-rival and former prime minister Tony Abbott, Mr Turnbull rejected the clean energy target — a move that is likely to spark a renewed ideological battle with the opposition.
“What we are seeing today is the total and complete capitulation of Malcolm Turnbull to the hard right of his party and his big coal donors,” said Richard Di Natale, Green party leader. He warned Canberra could not achieve its Paris targets based on the new plan.
Business groups gave the new policy framework a cautious welcome, with AGL, Australia’s largest energy retailer, saying: “With bipartisan support, it will provide investment certainty.”
Household power bills have risen 63 per cent since 2007, according to Australia’s consumer watchdog. Last year the state of South Australia, which relies on green power for almost half its electricity, suffered a blackout, focusing attention on the reliability of the national energy market.
Mr Turnbull said the new plan would deliver more affordable and reliable electricity while meeting international obligations to cut greenhouse gas emissions.
The plan contains a guarantee to ensure that energy companies deliver lower emissions, although it lacks detail on penalties should companies fail to comply.
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