Having recently attended an official briefing for the proposed National Energy Saving Initiative (NESI), a prediction: We’ll all be waiting quite a while for the single most sensible and important clean energy future reform still undone in Australia.
For mine, a market-based national energy efficiency scheme with tradable certificates makes plenty of sense economically and environmentally. Getting one, however, will be caught up in the political timetable of 2012-13, as well as classic federal-state tussles and the bureaucratic logjam of launching carbon pricing from this July 1 (Clean Energy Future scheme). This is the low down for NESI:
- The Australian Government is not formally committed to a national scheme, as yet, it’s only investigating one. But there is a hefty Issues Paper, a joint working group of the climate change and energy departments in Canberra, and a multi-stakeholder external advisory group. The path also is being cleared via the draft Energy White Paper released late last year, and the Government cites carbon pricing, renewable energy and energy efficiency as the three core elements of its climate strategy.
- Likely (but technically unofficial) major objectives for NESI include reducing electricity bills, through actual energy saving and also peak demand management; a social equity outcome of supporting low-income households, which are especially vulnerable to higher energy prices; and greenhouse gas abatement.
- If the Government does embrace the idea, and can tightly describe a scheme’s main elements, it will still have to get it past a rigorous Regulatory Impact Statement (RIS) process – with detailed cost-benefit analysis – before its being adopted as a firm policy commitment. If all goes well, the RIS could be completed by the end of 2012.
- Assuming the RIS is positive, you may be thinking the Government could then implement a NESI, but not on your life. Then it would have to negotiate with the states and territories through the Council of Australian Governments (COAG), starting with the Standing Council on Energy and Resources, in the first half of 2013.
- This is where the harmonisation hitch comes in. NSW, Victoria and South Australia already have their own energy saving schemes, and the starting point for a national scheme is that it would replace them in a good-for-all fusion. But harmony between states has never been a strong point of the Australian federation.
- Already, the Liberal-National Party Coalition governments in NSW and Victoria have agreed (in mid-December 2011, see article from The Australian newspaper) to work together on harmonising their respective energy efficiency schemes, among other things, at least in part because they aren’t completely happy with COAG. No one really knows what that means for a NESI.
- There’s also the not-so-minor matter that the Labor Government in Canberra is a minority one, on shaky electoral ground, may not run full-term into the second half of 2013, or even if does get that far, could lose the subsequent election. So assuming it goes to the polls with NESI as part of its policy platform, that yet may count for little.
- On the brighter side, common sense suggests that any future Government would support some form of major energy efficiency initiative, given that the target of a 5% reduction of greenhouse gas emissions (on Australia’s 2000 baseline) by 2020 – which is supported by both of the major political blocs – will be very hard to reach without lots of the low-cost abatement offered by saving energy.
- So, it may well take an election to confirm the fate of NESI, or some alternative model, as well as whether the carbon pricing scheme is retained as Labor (plus some Greens and Independents) wants, or dumped as the Coalition promises.
Even if everything falls into place, it’s hard to imagine a NESI in operation before mid-2014. Good thing some state-based schemes are already in place and are being expanded, because there’s lots of energy saving that can be done, plenty of public and business concern about rising electricity prices, and little if anything to be gained from inaction.
If you want to have some input on NESI, you have until February 17th to make submissions on the modelling for the potential scheme, and until February 27th to respond to the Issues Paper. Help is needed to secure the best possible outcome, so don’t hold back.
BTW: Running consultation on the NESI looks a lot less scary than doing it for the Murray Darling Basin water plan. No riots or report burnings have been observed, at least not yet.
