National Energy Guarantee moves step closer as Coalition endorses policy

The Australian government’s flagship policy still faces a battle to secure support in Parliament, as well as from wavering state governments.

The Australian federal government’s flagship energy policy, the National Energy Guarantee, moved another step closer this week after it was endorsed by the Coalition partyroom, a meeting of all MPs and Senators from the Liberal and National parties.

Following the meeting on Tuesday, federal energy minister Josh Frydenberg held a teleconference with state and territory ministers, during which they agreed to release for consultation the National Electricity Law amendments that would implement the NEG.

The Energy Security Board will now consult on the proposed changes for a period of four weeks on behalf of the Council of Australian Governments. Following this, there will be a further period of two weeks to refine the legislation before a decision is taken on the implementation of the NEG.

The policy still faces opposition from Labor-led state governments in Queensland and Victoria, as well as the government of the Australian Capital Territory, which are all calling for a more flexible renewable energy target, among other demands.

It is also still uncertain whether legislation will be passed by both houses of parliament, with up to 10 Coalition MPs said to be threatening to cross the floor and vote against the NEG despite the partyroom approval. This situation would leave the Coalition government dependent on support from the federal Labor opposition to secure the bill’s passage.

In a statement, Frydenberg said: “The federal government has held up its end of the bargain, having the Commonwealth legislation approved by the Coalition partyroom. It is now up to the Labor states to hold up their end and support the National Energy Guarantee to lower power prices.”

Victorian energy minister Lily D’Ambrosio said last week the NEG still needed “more work” and the state would continue to seek improvements to the policy. “We have always been clear – we won’t sign up to any scheme that threatens Victoria’s renewable energy industry and the thousands of jobs it’s creating in our state,” she said.