The energy guarantee ruckus shows why we need independent policy analysis

Could the national energy guarantee reduce wholesale electricity prices by 20% relative to no policy, as the Energy Security Board claims? Whether the claim is justified matters a lot, because the political argument for the Neg rests in large measure on the hope for lower power prices – even if any effect on household power prices would be much smaller than the wholesale price effect.

‘The Neg process has been rushed on account of
 election deadlines, and hemmed in on account of
 political red lines.'

Nerves have been fraying over this. The original version of the Energy Security Board Neg design document featured the price reduction claim but no analysis to back it up. This prompted a group of researchers to publicly call for the release of the modelling and to offer to review it. In response, the energy minister, Josh Frydenberg, said he was “questioning the bona fide” of the bulk of the signatories, because they had been “critical from day one”. A summary of modelling results and high level assumptions has now been released by the ESB, apparently as was planned all along.

Read the Frank Jotzo’s opinion piece from The Guardian - “The energy guarantee ruckus shows why we need independent policy analysis.”