2016 in review: Energy efficiency powers on despite policy turmoil
The EEC's Head of Policy, Rob Murray-Leach, cuts through the sound and fury to reflect on an eventful year in energy policy.
The pressure on the media to deliver up-to-the-minute coverage creates sound and fury, but it signifies nothing. To get a real picture of progress it’s important to step back and reflect on the broader arc of events. Which is a flowery way for me to introduce an overview of Australian energy policy in 2016, and the implications for energy efficiency.
The latest policy drama is a useful framework to consider some of these issues. The Australian Government released the terms of reference for its Climate Change Review on 6 December. The terms were suitably broad and left business leaders hoping the Turnbull Government might be able to craft a compromise policy on climate with enough political stability to improve the investment environment for the energy industry.
In particular, Minister Frydenberg stated than an ‘Emissions Intensity Scheme’ (EIS) would be considered as part of the review. A number of independent experts and political operatives have started to coalesce around an EIS for the energy sector. An EIS would set an emissions intensity baseline for electricity generators. Generators that generate electricity with an emissions intensity above this baseline would buy credits created by generators that are below the baseline.
The general consensus is that an EIS would have a lower impact on electricity prices than a carbon price – in fact, it could actually reduce energy bills compared to the current suite of policies.