Queensland, Victoria, South Australia and the Australian Capital Territory have taken the first step towards proceeding unilaterally with a new clean energy target, but the federal energy minister, Josh Frydenberg, insists the federal government will not be rushed.
The Labor states will ask the Australian Energy Markets Commission to do further work on how the central recommendation of the Finkel review can be implemented following deliberations between energy ministers in Brisbane on Friday.
After the talks, Frydenberg told reporters he considered the clean energy target an “important” recommendation of the Finkel review, but he said the Turnbull government was not yet in a position to sign off on the proposal because internal deliberations were continuing.
“We don’t need to rush, we just need to get the policy right,” Frydenberg said.
Friday’s meeting adopted all the other recommendations of the Finkel review apart from the clean energy target, and set down a timetable for their implementation.
Ministers agreed to establish a new Energy Security Board to oversee the existing regulators, and to the new energy security obligations recommended by the chief scientist.
The review recommended that new generators intending to connect to the national electricity market must meet technical requirements to contribute to fast frequency response and system strength.
The ministers also endorsed a new requirement that generators provide three years’ notice before any shutdown, which is designed to stop a repeat of the Hazelwood closure.
Energy ministers were also briefed on preparations Aemo is making for the coming summer to try to avoid blackouts. The regulator will contract for more supply in an effort to prevent shortfalls.
The Labor states signalled in advance of Friday’s talks that they are prepared to move ahead on the clean energy target if the Commonwealth either drops the recommendation, or continues to delay a response.
The South Australian government has urged the New South Wales government to join the pre-planning with other states. SA’s energy minister, Tom Koutsantonis, says NSW is particularly exposed by the current policy vacuum, and could face power shortages this summer.
Frydenberg acknowledged on Friday the market was looking for certainty about what policies would replace the federal renewable energy target after 2020, but he said it was a complex area of policy, and it was important to land the right response.
The Turnbull government faces an uphill battle to steer the clean energy target through a divided Coalition party room, with some Liberals signalling outright opposition.
But the Nationals leader, Barnaby Joyce, signalled this week he would take a positive recommendation to his party room if the Liberals proposed a clean energy target with a high enough threshold to allow coal fired generators to receive certificates.
In Coalition terms, this is a fillip, given Joyce’s stance is more positive than some Liberal MPs. But even if Frydenberg can achieve that outcome, and achieve the requisite cabinet and party room support, Labor is signalling it will not support a clean energy target if coal is in the mix.