A report released by APIA shows that Government policies favour renewable energy and ‘clean coal’ (carbon capture and storage) over natural gas.

“The Government is in danger of missing this opportunity to reduce emissions at the lowest possible cost,” APIA chief executive Cheryl Cartwright (pictured) said.

“Australia has an abundant supply of natural gas and it’s available now. Increasing the use of natural gas for power generation would dramatically reduce Australia’s carbon emissions, but the Government’s emissions reduction policies favour more expensive and less efficient options.”

The APIA report points out that the Carbon Pollution Reduction Scheme (CPRS) in its pure form would put a price on emissions and allow the market to guide power generation companies towards choosing the most efficient and effective fuel and/or technology to reduce their emissions.

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However, if the CPRS is combined with a 20 per cent Renewable Energy Target (RET), emissions reduction becomes increasingly expensive, with reduced encouragement for coal-fired power generators to switch to natural gas.

Electricity generated by natural gas has less than half the emissions of coal-fired power generation; and it uses about half the water. Natural gas is less expensive than renewable energy sources and the technology is already well developed.

“Of course, the nation must eventually employ renewable energy, but this would happen under the CPRS as the renewable technologies become more efficient and affordable,” Ms Cartwright said.

“The Government is creating a false and very expensive system of reducing emissions if it goes ahead with its plan to introduce the requirement for 20 per cent renewable energy in power generation by 2020.

“APIA urges the Government to expand the RET to include ‘cleaner’ energy, or introduce a natural gas target as the Queensland Government has done.

“The Australian Government should have enough confidence in the CPRS to allow it to achieve Australia’s emissions reduction targets,” Ms Cartwright said.