Australia halts renewable energy subsidies

Australian Prime Minister Malcolm Turnbull unveiled a new energy policy on Tuesday that he said would make electricity more "affordable and reliable."

The plan, known as the National Energy Guarantee (NEG), is notably different to the Clean Energy Target (CET) that was recommended by the country's chief scientist following a landmark review of the energy sector earlier this year.

The CET would have forced power companies to provide a certain percentage of their energy from renewable, low emission sources such as wind and solar to help Australia meet its obligations under the Paris climate change agreement.

The alternative backed by Turnbull's conservative coalition will instead require energy providers to have a minimum amount of power from "dispatchable" sources such as coal, gas, batteries and hydro, while still reducing carbon emissions.

"This is a national energy guarantee that will ensure that we have affordable power; that it is reliable to keep the lights on. And we can afford to keep them on and meet our international commitments," Turnbull said.

The government also said it would scrap incentives and subsidies for wind and solar generators from 2020 to lower costs for consumers, adding that its approach would level the playing field and encourage "the right investment" in all forms of power.

Environmental groups have criticized the decision, warning it signals a damaging shift away from renewables in a country that relies heavily on its abundant coal reserves for power and export revenues.

Low prices, low emissions?

Turnbull argued the plan was a "game-changer" that would still allow Australia to reach its pledge under the Paris climate accord to cut its 2005 emissions by around a quarter by 2030. He said consumers could expect their annual bills to drop by an average of 110 Australian dollars (US$86 or €73) over a 10-year period from 2020.

A state-wide blackout in South Australia during a storm last year prompted the government to ask Chief Scientist Alan Finkel to carry out a review of the country's energy sector. Finkel delivered his findings in June, together with a list of recommendations that included the CET plan.

Speaking to reporters Tuesday, Finkel said that although the government had decided against his proposal, there were multiple ways to achieve the same outcome.

"What we are looking at is logical," he said, calling the replacement plan a "credible mechanism."

'Grave mistake'

The opposition Labor party, which had offered bipartisan support for Finkel's CET, criticized Turnbull's new policy, with leader Bill Shorten saying it would be ruinous for Australia's renewable energy sector.

The Climate Council, an Australian non-profit, described it as a "grave mistake" and a "disaster for both energy prices and pollution."

"Any policy that doubles down on old polluting power at the expense of clean energy is a barrier to progress," the organization said.

Mark Wakeham from conservation group Environment Victoria accused the government of rejecting "a clean energy target in favor of a coal energy target."

"Australia joins Donald Trump's United States as one of only two major national governments to remove support for investment in renewable energy and redirect it to aging and polluting power stations," Wakeham said in a statement.

Meanwhile, John Grimes from the Australian Solar Council told Australian public broadcaster the ABC that ending subsidies for renewables could cost the sector more than 10,000 jobs.

The Australian Chamber of Commerce and Industry, a business advocacy group, welcomed the government's plan, saying it would cut costs for power and ensure electricity reliability.

Former Prime Minister Tony Abbott, who supports the construction of a new coal power station and had been publicly critical of the CET, tweeted that the new policy was a sign of "progress."

The government will need backing from the states and territories, which have their own energy policies, before its plan can be rolled out.

nm/msh (AP, dpa)