Australia's National Energy Guarantee Continues Its March Towards Approval.

Legal News & Analysis - Asia Pacific - Australia - Energy & Project Finance

18 August, 2018


NEG to face the Coalition party room and the release of draft implementation legislation


What you need to know


The final design of the National Energy Guarantee will be presented to the federal Coalition party room on 14 August 2018.


If endorsed, the COAG Energy Council has agreed to release an exposure draft of the amendments required to the National Electricity Law to implement the Guarantee. 


Some details of the Guarantee, such as the setting of the emissions reduction targets, remain hotly debated.


What you need to do


Stay tuned for our upcoming Energy Alert which will discuss the most important elements of the final design.


On 10 August 2018, the Council of Australian Governments (COAG) Energy Council agreed to release the exposure draft of the amendments to the National Electricity Law required to implement the National Energy Guarantee (NEG).  


This agreement follows the release of the final detailed design of the NEG by the Energy Security Board and the final design of the Commonwealth elements (relating to emissions reductions) by the Department of the Environment and Energy on 1 August 2018.


The release of the exposure draft is subject to the federal Coalition party room endorsing the final design of the NEG on 14 August 2018. 


Some jurisdictions maintain reservations as to certain elements of the NEG, particularly the emissions reduction target. 


In particular, Queensland and Victoria consider the target to be too modest, while South Australia has expressed unconditional support with an emphasis on implementing the scheme quickly in order to provide greater security to South Australia's power supply.


Victoria has identified several key requirements that the Coalition must consider if it wishes to obtain Victoria's support for the scheme, including that the emissions reduction target:


  • must only be permitted to increase, and never move backwards;
  • must be set every three years; and
  • must be set through regulations rather than legislation.


The Federal Government has said that the emissions reduction target should be enshrined in legislation, and not regulation, to provide certainty to investors. 


We will publish a more detailed update following the Coalition party meeting on 14 August 2018, to provide insights on what impacts the final form of the NEG may have on electricity industry.

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For further information, please contact:


Paul Newman, Partner, Ashurst