FY19 Outlook, page-25

Great find @Dr Feelgood

Did some further digging on this....

I think the selling pressure we saw (across the energy sector) was due to the political uncertainty following Dutton’s challenge (given that he opposes the NEG). It just so happened to coincide with SXY’s announcements (which I thought were positive, and analysts seem to have shared this view based on their re-rate).
It seems that the adoption of the NEG is the preferred position for SXY, based on ID’s comments (which he actually mentioned in the conference call as well).
Given Turnbull has survived, theoretically we should see the ‘de-risking’ back to the status quo, but it seems that the market has been reminded of the sovereign risk of investing in Australia (Our government really needs to stop this nonsense of challenging and backflipping on policy – this isn’t Zimbabwe).


National Energy Guarantee (NEG)

• https://www.energy.gov.au/government-priorities/better-energy-future-australia
• http://theconversation.com/infographic-the-national-energy-guarantee-at-a-glance-85832
• A reliability guarantee will be set to deliver the right level of dispatchable energy—from ready-to-use sources such as coal, gas, pumped hydro and batteries—needed in each state. It will be set by the AEMC and AEMO.
• An emissions guarantee will be set to contribute to Australia’s international commitments. The level of the guarantee will be determined by the Commonwealth and enforced by the AER.
• Malcom Turnball / Ian Davies/ oil CEOs is for it
• Dutton / Abbott against it
• "The instability in Australian politics comes at a high cost to business confidence, as companies delay plans and stall investment," he said. "This comes at the cost of jobs and economic development. The business community needs policy certainty."

Gas has been considered a suitable transition fuel to renewable energy for three main reasons:

1. Next cheapest electricity source after coal
2. Lower emissions profile than coal
3. More flexible, as gas generation can start and stop much more quickly than coal. This is particularly important in electricity systems with intermittent renewable sources such as solar and wind.

While they have an emissions benefit compared with coal, CSG and other gases are not sufficient to reach the emissions targets necessary to keep climate change within 2°C. Thus, experts maintain that investment in lower emission energy options, such as renewable energy, and increasing energy efficiency remain crucial.

Here is an interesting paper on it
http://www.coagenergycouncil.gov.au...response to Energy Guarantee consultation.pdf