Coal-fired power plants have been thrown a lifeline by Malcolm Turnbull’s “game-changing” new energy policy, which boasts it can cut electricity bills, end summer blackouts, and meet ‘s Paris emissions commitments with “no subsidies, no taxes, and no trading schemes”.
The Prime Minister said the framework, which is scheduled to begin from 2020, was recommended by “real experts in this field, in the national energy market and its operation”.
“It creates a level playing field for the first time. No more industry policy, no more picking winners, no more favouring one technology after another, but simply ensuring that we have a reliable energy system, that we keep the lights on, that we do so in a way that is affordable and, of course, we meet those international commitments,” he said.
The proposed system, which requires the approval of states leaders at future Council of n Governments meetings, will work by requiring electricity retailers to source a minimum component of their power from so-called “dispatchable” or baseload suppliers – that is, not intermittent energy such as wind and solar but coal, gas, and hydro.
Prime Minister Malcolm Turnbull with Environment and Energy Minister Josh Frydenberg. Photo: Alex Ellinghausen
Those levels are yet to be set and will be reviewed annually.
Acting on advice drawn up in little more than weeks by COAG’s new Energy Security Board – itself a recommendation of the chief scientist’s recent report known as the Finkel review – the government secured the enthusiastic endorsement of pro-coal MPs in its party room, who praised the shift away from emissions reduction towards affordability and reliability of supply.
But the so-called national energy guarantee – which the government has claimed “could” deliver annual average household savings of up to $115 and achieve 36 per cent renewable energy take-up across by 2030 without the renewable energy target – comes with scant modelling, and with key details still to be finalised.
While the Labor opposition warned of major damage to the renewables sector, it is yet to determine a final position on the plan, leaving open the possibility of political bipartisanship a greatly improved level of investment certainty.
If that can be secured, the policy could see coal-fired generators reassessing their options. Government officials are confident that had the national energy guarantee been in place five years ago, it would have delayed the closure of coal generators such as Northern in South in 2016, and perhaps prolonged the life of the soon-to-shut Liddell plant in New South Wales.
Mr Turnbull called the national energy guarantee a game-changer “that will ensure that we have affordable power, that it is reliable … and that we meet our international commitments under the Paris Agreement to cut our emissions”.
“In other words it delivers affordability, reliability, and responsibility.”
Environment and Energy Minister Josh Frydenberg, who drove the process, proclaimed the policy as a “credible, workable, pro-market policy that delivers lower electricity prices”.
The government has commissioned more detailed modelling to support the changes and will now embark on a series of consultations, beginning with the states, but also including the opposition and crossbenchers.
While the new arrangements do not require legislation, Parliament will need to legislate the Paris target of a 26 to 28 per cent reduction of n emissions by 2030, against 2005 levels.
Federal Labor has already questioned how much the plan would reduce household power bills, which modelling suggests might be as low as 50?? a week from 2020 and as high as $2 a week by 2030.
Victorian Premier Daniel Andrews complained that former prime minister Tony Abbott’s recent campaign to undermine Dr Finkel’s proposed clean energy target had caused Mr Turnbull to retreat in the face of an internal party room revolt.
“Alan Finkel has been replaced,” he said. We’ve now got Tony Abbott as chief scientist.”
Greens leader Richard Di Natale claimed Mr Turnbull had “done what Donald Trump had done” but less spectacularly.
“He’s effectively pulled out of the Paris Agreement,” Senator Di Natale said.
Mr Abbott took to Twitter shortly after the Coalition joint party briefing to write: “Progress at today’s party room. The clean energy target has been definitively dropped”.
However, if Dr Finkel was aggrieved the clean energy target had been rejected, he wasn’t showing it, instead, endorsing the Coalition government’s new plan as credible.
“There’s always more than one way to skin a cat.”
Dr Finkel conceded the clean energy target was “awkward for various reasons” but said he was not privy to why the government refused to embrace it.
The n Chamber of Commerce and Industry chief executive James Pearson cautiously welcomed the prospect of lower prices and greater reliability but warned “the detail, and its ability to win bipartisan support will be critical”.