April 20, 2018 / 12:19 AM / a month ago

Australian energy leaders look to end power and climate policy war

MELBOURNE (Reuters) - Australia moved a step closer on Friday to ending a decade of political bickering over climate and energy policy, with broad support emerging for a national power plan that would also include emissions cuts.

State energy ministers agreed to push ahead with a detailed design for a National Energy Guarantee, as proposed by the conservative government, to be put up for approval in August.

“This is Australia’s best chance to integrate energy and climate policy and deliver cheaper, cleaner, more reliable power to all Australians,” Energy Minister Josh Frydenberg told reporters.

He said he was confident that issues raised by the states, including differences on emissions cutting goals, could be worked out by August.

Carbon policy disputes have claimed the heads of two prime ministers and then-opposition leader Malcolm Turnbull over the past 10 years, killing investment in fossil-fueled power needed for a stable grid and leaving the states to take the lead on renewable energy.

The National Energy Guarantee would require the power sector to cut carbon emissions by 26 percent from 2005 levels by 2030.

At the same it will require electricity providers to ensure they have enough supply from steady power sources like coal- and gas-fired plants to back up intermittent sources like wind and solar power.

Inching toward long elusive bi-partisan support, Labor opposition energy spokesman Mark Butler and two key Labor-led states, Victoria and Queensland, backed the call to continue work on the proposal.

Victoria and Queensland had been seen as the main stumbling blocks, as they want to cut carbon emissions more sharply than the government, with more ambitious targets for renewable energy and plans to end coal-fired generation.

“We’re pleased that we’ve received a number of assurances, and that is that the states’ own renewable energy and emissions reduction targets will be honored,” Victorian Energy Minister Lily D’Ambrosio told reporters after the meeting.

Frydenberg said the states’ own emissions targets would stand under the umbrella of the National Energy Guarantee, requiring them to ensure there is back-up for wind and solar power to keep the lights on.

Labor has said the policy must be structured to allow the party to ramp up the emissions reduction target if it wins the next federal election.

A rare coalition of business groups, power providers, and energy consumers has urged politicians to back the plan, seeking an end to years of investment uncertainty which has led to blackouts and soaring power prices in Australia.

“Lack of agreement on the NEG will see increased volatility in markets, higher energy prices, a lack of forward planning and investment, and likely result in manufacturing jobs heading offshore to more secure and affordable energy jurisdictions,” the Energy Users Association of Australia said in a statement.

Reporting by Sonali Paul; editing by Richard Pullin

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