SYDNEY – The Australian government announced on Tuesday they plan to scrap subsidies for the renewable energy sector as part of an energy plan aimed at reducing power bills and guaranteeing supply to households and businesses.
The subsidies, to be scrapped from 2020, will be replaced with a plan called National Energy Guarantee that will allow distributors to buy energy at a base price, increase the use of more clean energy annually and allow generators to be switched on almost immediately in case of a supply failure.
“This is a national energy guarantee that will ensure that we have affordable power, that it is reliable (...) and that we meet our international commitments under the Paris Agreement,” Prime Minister Malcolm Turnbull said at a press conference.
Energy Minister Josh Frydenberg, who was also at the press conference, said the policy – recommended by the Energy Security Board – is dependable and will result in cheaper power bills.
The decision ignores recommendations by government chief scientist Alan Finkel for a gradual transition to renewable energy, with an aim to supply 42 percent of the country’s total energy requirement from this sector by 2030.
The coalition government, which includes supporters of the coal industry and climate change skeptics, said that households will save up to AU$115 ($90.22) annually between 2020 and 2030.
Electricity prices have increased by more than 60 percent over the last decade in Australia.
Labor Party leader Bill Shorten said Turnbull kowtowed to the demands of ex-prime minister Tony Abbott, a climate change-sceptic.
Mark Butler, Labor spokesperson on climate change, said that the plan will destroy the renewable energy sector and lead to thousands of job losses.
Richard di Natale, leader of the Australian Greens, said that the announcement will stop Australia from fulfilling the Paris Accord targets.
Currently, more than 85 percent of Australia’s energy consumption is sourced from fossil fuels, mainly coal, an amount which should be reduced to mitigate the effects of climate change according to scientists.