Energy

Analysis suggests 15,000 jobs at risk because of lack of new renewable projects under national energy guarantee

and
A worker installing solar panels. Unless the national energy guarantee’s 26% emissions target is lifted jobs will be lost, a new report warns.
A worker installing solar panels. Unless the national energy guarantee’s 26% emissions target is lifted jobs will be lost, a new report warns. Photograph: Lucy Hughes Jones/AAP

Activist groups are intensifying efforts to persuade Australia’s states and territories to demand the 26% emissions reduction target in the national energy guarantee be ramped up, with new analysis suggesting jobs in renewable energy will be lost.
A new projection from Green Energy Markets, funded by GetUp, says up to 15,000 jobs in large scale renewables projects in Queensland and Victoria are at risk unless the Neg’s emissions reduction targets are increased.
The intervention follows confirmation that the Neg will only deliver additional emissions reduction of 38 million tonnes between 2020-21 to 2029-30 relative to a scenario without the guarantee – an admission by the Energy Security Board that confirms previous analysis that the scheme adds little to abatement efforts already underway.
A separate analysis by progressive thinktank the Australia Institute also warns that a 26% target for pollution in the electricity sector will increase pressure on sectors like agriculture to reduce emissions to comply with international climate change commitments.
Echoing recent arguments from the conservative Liberal MP, Craig Kelly, the Australia Institute says imposing a 26% target in agriculture would mean farmers would have to cull their herds. “In 2030, this would include 2.9 million fewer beef cattle, 8 million fewer sheep, 290,000 fewer diary cows and 270,000 fewer pigs,” the group says.
But if the level of ambition for emissions reduction in electricity was increased, that would take pressure off other sectors of the economy where abatement costs are higher. “The more that electricity generation reduces emissions, the less the agriculture sector needs to do,” the institute says.
The architects of the Neg have told state governments they can sign on to the policy mechanism without endorsing the Turnbull government’s low emissions reduction target. The Energy Security Board’s intervention in the fraught debate is an attempt to open the way for a compromise at a make-or-break meeting in August, giving state governments political cover to accept the scheme.
A final policy paper outlining technical details of the scheme has been circulated for the upcoming meeting of the Coag energy council, and the ESB has told the states and territories that supporting the Neg mechanism “does not constitute approval, agreement or endorsement of the elements of the emissions reduction requirement that are the responsibility of the Australian government”.
But the ESB’s paper also underscores the low ambition of the Turnbull government’s scheme. It confirms the scheme as currently envisaged will add little additional abatement over the decade between 2020 and 2030, although the paper emphasises repeatedly the emissions reduction target is scaleable by future governments.
The ESB paper says emissions in the national electricity market are expected to be 24% below 2005 levels by 2020-21. The Turnbull government’s target is a 26% reduction on 2005 levels by 2030.
The energy minister, Josh Frydenberg, has travelled to coal country in Queensland at the request of Nationals MPs. Some Nationals are lobbying for taxpayer support for the coal industry as the price of their support for the Neg – an eventuality that would make it harder for some states to support the policy.
Frydenberg will tour Nationals-held electorates on Wednesday.
While the Neg enjoys support from a broad range of stakeholders, activist groups and the environment movement have intensified lobbying efforts to persuade the Victorian and Queensland governments to reject the proposed pollution target if they intend to sign on to the policy mechanism in August.
As well as releasing the new projection from Green Energy Markets, GetUp also released the results of its renewable energy index showing that by 2020 renewables would make up 33% of the national electricity market, well above the 23.5% mandated by the renewable energy target.
The index, also compiled by the Green Energy Markets advisory, found that by 2020 Victorian renewable energy would generate 39.4% of the state’s power consumption.
Queensland has experienced the fastest growth in renewables supply and development – renewables are up from 7.4% of the power supply in 2015 to a projected 25% in 2020.
Green Energy Markets estimated that in Queensland the 1,456 megawatts of large-scale solar currently under construction will peter out to just 129 megawatts by next June under the current Neg targets of reducing emissions in the electricity sector by 26% by 2030.
That reduction would result in 3,494 jobs in construction of solar in Queensland in June this year falling to just 153 jobs within 12 months and then zero by December 2019.
Construction of wind energy in Queensland would also fall from 677 megawatts in June 2018 to zero by June 2019, it projected. That would see jobs fall from 2,977 to zero by mid next year.
According to the index New South Wales is on track to source just 19.7% of its power from renewables by 2020 and 26.1% by 2030. South Australia will generate 70% of its electricity consumption with renewables by 2020 and 85% by 2030.
Tristan Edis, the director of analysis at Green Energy Markets, said that some corporations would continue to make long-term power purchase agreements in coming months that would support renewable projects but “after that things look very bleak”.
“The renewables sector is likely to become a victim of [its] own success because all the extra supply of solar and wind will act to substantially depress wholesale power prices and renewable energy certificates under the RET [renewable energy target] will plunge in price close to zero,” he said.
Edis said the Victorian government’s tender to construct 650MW of renewable energy and a 400MW tender from the Queensland government “will offer a bit of a temporary reprieve”.
But “by mid-2020 the construction activity will be pretty much all done and we’ll be facing a bust after the boom, unless we see some change to the emissions target under the national energy guarantee”, he said.
GetUp campaigns director Miriam Lyons said the renewable energy index demonstrated “that with strong targets and the right political leadership, Australia could have a clean and green future”.
“The rapid ramp-up in investment in the past three years have shown the kind of growth possible with strong targets and supporting policy and demonstrates we can reach for far greater targets down the track.