Power policy to save $550 a year on bills
STATE and federal ministers are being urged to settle on the basic design of the Turnbull government's signature energy policy, as new analysis shows households would save $550 on their power bills.
The figure, $150 higher than previously stated, was set out in a document handed to state and territory energy ministers ahead of a meeting to discuss the National Energy Guarantee with the federal energy minister on August 10.
A leaked copy of the Energy Security Board analysis shows the average east coast household will save $550 a year on their retail bill over the 2020s relative to 2017/18.
"The continued connection of additional renewable generation projects to the NEM (national energy market) in coming years is projected to see prices fall from today's elevated levels," the 39-page policy proposal says.
The average east coast household will save $550 a year on their retail bill over the 2020s relative to 2017/18.
"Of this, nearly $150 per year is forecast additional savings as a result of the guarantee," the ESB said.
The five drivers behind the lower retail prices were identified as policy stability, reduced risk for new investments, increased contracting, deeper contract markets and an increased voluntary demand response.
Addressing a key criticism by the states and federal Labor - the unambitious 26 per cent emissions target set by the government - the policy document says: "It is possible that higher emissions reduction targets may be set in the future by the Australian government."
"Further, the design of the guarantee does not limit the ability of states and territories to set and meet their own emissions reduction or renewable energy targets."
The Clean Energy Council has restated its warning that the target outlined in the National Energy Guarantee remains too low to encourage sufficient investment in energy generation.
Chief executive Kane Thornton said most credible analysis suggested the proposed 26 per cent emission reduction target would be met by the electricity sector in just a few years.
"Encouraging new investment into the next decade remains critical to reducing power prices, as our old coal-fired power plants continue to close," Mr Thornton said on Wednesday.
But first, the council wants both major federal political parties and all state and territory governments to push on with developing the framework of the NEG, believing it can be "ratcheted up" down the track.
"With the policy architecture settled, it would be easier to increase the emissions target in the future," Mr Thornton said.