In October 2017 the Turnbull Government released an outline of its energy policy for the period beyond 2020. Its centrepiece is the National Energy Guarantee (NEG), which is designed to target the three objectives of affordability, reliability and sustainability.
At the time of release, comprehensive economic modelling of the NEG had not been performed. However, the government suggested that the NEG was capable of saving households of around $110-$115 per year over the period 2020-2030. The Turnbull Government has written to the states and territories seeking their input into the design of modelling.
KPMG has examined the NEG and has the following observations:
In summary, the sensitivity of the Australian economy to rising electricity prices highlights the importance of establishing a stable, effective policy for achieving the objectives of affordability, reliability and sustainability. The longer the existing uncertainty remains, the slower will be the investment response to these challenges, resulting in the continuation of unnecessary volatility in electricity prices into the foreseeable future.