Government confirms opposition to EIS ahead of final Finkel energy report – July 2017

Filed under: Environment and Indigenous Affairs, Climate Change, Environment, Politics, Australian Politics,

Energy and Environment Minister Josh Frydenberg has again ruled out introducing an emissions intensity scheme (EIS), saying it would threaten the stability of the electricity sector.

He said an EIS would quickly force out coal generators and lead to more instability in the system.

The statement came just days ahead of Chief Scientist Alan Finkel's final report into the electricity sector, which was due to be presented to COAG on Friday 9 June.

Dr Finkel's draft report, released last December, found an EIS would have “the lowest economic costs and the lowest impact on electricity prices” of all the options presented to meet Australia's climate commitments.

But Mr Frydenberg said an EIS would punish generators which emit high levels of greenhouse gasses. “Right now that would mean we would quickly push out the black and the brown coal generators that we can't afford to lose because of the impact it would have on the stability of the system,” he told the ABC Lateline program.

Mr Frydenberg said a lot has changed since the modelling for an EIS was conducted.

“The modelling was done on cheap, available gas, $6 a gigajoule gas … we are now seeing companies quoted $10 to $12 to $14 a gigajoule gas, so the numbers just don't stack up,” he said.

Appearing before a Senate Estimates Committee, the Chief Scientist suggested there were two pathways for Australia to meet its climate targets — renewable energy generation or controls on emissions. “The commitment that we've made is for a 26-28 per cent reduction by 2030 of emissions on a 2005 baseline,” Dr Finkel said.

“Now you can get to that by having a system that involves a certain level of renewable generation.

“You can get to that by having a system that controls the emissions intensity, if you know what the demand will be. And we will be addressing the means by which that outcome can be achieved.”

The Government has resisted pressure from energy generators, big business, scientists, state governments and the Federal Opposition to implement an EIS.

The Coalition has also attacked Labor over its commitment to 50 per cent renewable energy by 2030.

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