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Turnbull’s finance pledge to lock in deal on energy guarantee

Turnbull’s finance pledge to lock in deal on energy guarantee

Malcolm Turnbull will commit to underwriting new dispatchable power generation in a bid to get his signature energy policy through the Coalition partyroom next week, as Victoria issued a list of last-minute demands to win its support for the government’s nat­ional energy guarantee.

The Victorian Labor government last night circulated a list of four demands — including a push for carbon emissions targets to be amended by regulation every three years and for emissions ­reduction targets to be “only ­allowed to increase over time and never go backwards” — in a fresh threat to the Prime Minister’s ­efforts to secure support for the NEG.

Victoria, Queensland and the ACT this week increased pressure on the government to secure support for the NEG at Tuesday’s ­Coalition partyroom before they offered support for the proposed national energy framework.

The Australian understands Mr Turnbull will provide an ­unambiguous ­commitment to Coalition MPs to support com­petition watchdog Rod Sims’s recom­mendation for the gov­ernment to enter into low-cost ­energy ­offtake agreements to help new-­generation projects secure ­finance.

The government is working ­towards an end-of-year deadline before unveiling its full response to the Australian Competition & Consumer Commission’s recent report on lowering electricity ­prices, but will fast-track the commitment to underwriting new “firm” power generation.

NEG critics on the Coalition backbench see the measure as a potential means of supporting new coal-fired power generation. ­

Liberal MP Craig Kelly des­cribed the measure as “critical”, while the Nationals partyroom sees the measure as non-­negotiable in ­securing its support.

Victorian Energy Minister Lily D’Ambrosio last night issued a new set of ­conditions for the Andrew government, including for the NEG’s emissions target to be set by regulation every three years.

The demands would make it tougher for the government to sec­ure agreement with Victoria, as Coalition backbenchers have warned that the target must be legislated. Ms D’Ambrosio said Vic­toria would not sign up to the deal unless the condition was met, along with a guarantee the emissions target could only be ­increased, not decreased.

She said Victoria also required the establishment of a transparent registry, accessible by regulators and governments, to ensure the NEG was working in the best interests of consumers.

“We can still get this right — but only if Malcolm Turnbull ­stares down the climate-crazies in his party and puts a workable scheme on the table that doesn’t hurt local jobs and households,” Ms D’Ambrosio said.

Federal Energy Minister Josh Frydenberg said on Monday that allowing the government’s 26 per cent emissions reduction target to be changed by regulation would introduce too much volatility into the scheme. “You can’t just flick a switch and turn a target from 26 per cent to (Labor’s) 45 per cent with all the subsequent consequences that that will mean for ­energy companies,” he said.

Major energy users yesterday urged the states to back the NEG at a meeting of COAG energy ministers this Friday. In a statement, 23 companies and peak ­industry groups said the country needed a mechanism to reduce power costs, maintain ­reliability and lower emissions.

The Australian

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