The government has put the energy market on a clear path towards net-zero carbon emissions, Energy Minister Chris Bowen says, even as work continues on the details.
Federal and state energy ministers convened on Friday to consider how the market for electricity will function during the shift to renewable energy, such as ensuring stable power supply and regulating Australia’s biggest polluters.
The meeting resolved to amend the national energy objectives, or the rules that guide the energy market operator and regulators, to focus on reducing carbon emissions.
Mr Bowen said that would change the way in which decisions were made by market operators and regulators.
‘‘It puts it at the heart of their decision making,’’ he told the ABC’s Insiders.
‘‘It should have happened a long, long time ago.’’
Mr Bowen said the new objectives mean decisions will have to be made with equal regard for “climate and emissions reduction” as other objectives relating to “reliability, price and safety”.
‘‘We’ve fixed it, and it will make a material difference to how they do their work because they can only comply with the objective,’’ he said.
But the government is yet to reach a definitive answer on some of the key details relating to energy transition.
One such problem relates to how to handle the risk of blackouts, which recently hung over the national electricity market.
The Energy Security Board had proposed paying power companies to maintain additional capacity that can be drawn upon in times of high demand to avoid blackouts.
On Friday the nation’s energy ministers did not adopt a proposal by the board to have those payments extend even to Australia’s ageing fleet of coal power generators, which had raised concerns their lives would be extended.
Instead, ministers resolved to take “more active control” of the work to manage the exit of coal-power generation – work that the Coalition government had handed to the ESB – but Mr Bowen did not expressly rule out payments for coal and gas generators.
“We all agree we need, if you like, a safety net, to help us with that transition,” Mr Bowen said.
“The ministers have been talking about that, but we haven’t made any final decisions.
“We’re all trying to do the same thing, which is to manage a very complicated transition, but manage it more quickly.”
Mr Bowen said that the transition to renewable energy had been poorly managed under the previous government and said that recently four gigawatts had been taken out of the market with only one being put in.
Mr Bowen said he would be releasing a discussion paper this week about how Australia’s 215 biggest polluters will be treated under new targets that commit to reducing carbon emissions by 43 per cent by decade’s end.
“The trajectory is very clear, we’re putting these emitters on a pathway to net zero by 2050,” he said.
“I’m looking forward to feedback from climate groups, MPs and senators about the detailed design.”
Mr Bowen confirmed that achieving net zero would allow for big polluters to purchase “offsets”, or reductions in carbon emissions elsewhere, a process he said the government would ensure was credible and which would be overseen by the former chief scientist Ian Chubb.
He denied that the mechanism would prevent the opening of new coal and gas projects.
“It’s designed that all facilities, whether they be old or new, are reducing their emissions,” he said.
The Greens recently warned they would seek to have the safeguard mechanism, include rules ensuring that new coal and gas projects were stopped.
