If you’ve been following the major news outlets lately, you might have stumbled across the acronym NEG. What is the NEG you may wonder, Why should I care you might ask. The following article is here to allay these and other questions and to provide an explanation outside of the convoluted, jargon filled descriptions provided by major news sites.
What is the NEG?
The NEG or National Energy Guarantee is a policy thought up by Malcolm Turnbull’s liberal government. It is designed to reduce the cost of electricity for the average consumer, reduce carbon emissions and even cut electricity wholesale prices by around 20%. If the National Energy Guarantee is put into effect, It has been said that the average Australian’s power bill will be reduced by $550 per year on average.
How would the NEG work?
If you’re wondering how this proposed legislation would actually reduce the cost of electricity, and ultimately translate to smaller power bills for the average Aussie, you’re not alone. It looks like a large percentage of the Australian public is skeptical to say the least, after all, it wouldn’t be the first time one of Malcolm Turnbull’s promises hasn’t turned out exactly as planned.
According to Tony Wood, an energy expert from the Grattan Institute, “the NEG will provide certainty to the market, which should help bring prices down from the recent high levels. The National Energy Guarantee very sensibly does not assume any particular form of technology to achieve reductions.”
Tony Wood told the ABC: “The assessment at the moment is that … consumers will be better off as a result of the guarantee. But it does require energy retailers — the people we actually buy our power from — to ensure the electricity they supply is producing less emissions every year between now and 2030.”
“That is locked into the guarantee,” he said.
Mr. Wood says customers can have confidence that there will be a reduction in emissions, the biggest part of that coming from a shift from coal and gas to renewable sources of energy.
“The cost of connecting those new renewables to the system is included,” Mr. Wood said.
Too good to be true?
NEG sounds too good to be true? Well it probably is, at least in the short term.
The Turnbull government is struggling to get the support it needs from state and territory decision makers to enact such a policy nationwide which essentially brings the entire rollout to a grinding halt.
Until each and every state agrees to the new policy, it is little more than another promise to the Australian people that may or may not be delivered.
In the mean time, you can continue to enjoy high energy prices allegedly caused by an uncertain electricity market.