No CET creates uncertainty for energy, Origin CEO says

13/05/2019

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The clean energy target is needed to attract investment and provide clarity for business, and is not all about subsidies, says Origin Energy chief executive Frank Calabria.
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“Generally the message around the [clean energy target] CET is being called from a point of certainty, not a subsidy, that’s what people are calling for,” Mr Calabria said at The n Financial Review’s National Energy Summit on Tuesday.

The federal government has signalled it will not implement the CET, the key recommendation from the Finkel Review. Energy Minister Josh Frydenberg argues it is not needed because of the declining costs of renewables and storage, greater efficiencies in thermal generation and an increasing focus on dispatchable power in the system.

“We are considering the Finkel Review’s 50th recommendation – to which we’ll respond before the end of the year,” Mr Frydenberg said on Monday.

Mr Calabria said a clean energy target – or a similar process – provides companies with certainty and a clear path for investors.

“It gives us the trajectory upon which we can hit an emissions reduction,” Mr Calabria said.

“We think there are workable solutions, we just want to get on with it now.

He argued that the lack of a price signal ends up hurting customers and delays or even stops investment decisions.

“The key thing for me is that people want to invest up front earlier so you don’t get yourself into the situation that we’ve seen ourselves in over the last six months with the rapidly escalating price.

“We’ve got to think to 2030 and beyond if we are going to continue to transform our energy system,” he said.

South ‘s Premier Jay Weatherill proposal to “go it alone” on setting clean energy targets was rejected by Mr Calabria, who said “we’d prefer a national coordinated mechanism”.

He added that while Origin would be open to the idea if states were to put it forward, “it’s not our first preference”.