In October the Federal Government announced the National Energy Guarantee (NEG) as a major reform of the National Electricity Market (NEM). The policy aims to improve system reliability, reduce greenhouse gas emissions and lower electricity costs for consumers. There are separate reliability and emissions targets which are to be achieved by regulating the wholesale electricity purchases of retailers to ensure they meet minimum requirements.
The details of the NEG are still to be worked out. How much additional contract cover will retailers by required to procure under the two guarantees? How can customer electricity costs be reduced if retailers are required to purchase more contracts? How many of the Finkel Review reliability recommendations will be replaced by the NEG? Will adequate consideration be given to the impacts to competition and what are the implications for small retailers? Will the Queensland and Victoria governments press on in full with their renewable energy targets?
The NEG could be the biggest intervention by government in the history of the NEM. This edition of Insiders discusses these issues.