According to Giles Parkinson at RenewEconomy, energy minister Josh Frydenberg has written to the Energy Security Board (ESB) to make sure they stay focussed on the task at hand. He has asked them “to restrict its modelling to only one specified short term target, and then assume emissions would “flatline” after that.”
- The intention of the order is clear: If the ESB were to factor in a long term target that matched the over-riding goal of the Paris climate treaty (keeping global warming well below 2°C), it would no doubt produce a document for the rapid decarbonisation of Australia’s grid.
Obviously we can’t have any of that nonsense to distract us!
Parkinson says that the ESB letter proposing the National Energy Guarantee, which was delivered on 13 October was in answer to a letter from Frydenberg on 3 October, and then was accepted on the same day.
The Oz now cites modelling which the government has and won’t share claiming that the extra costs of renewables would be $200 a year, compared to the claimed $100 cut from the NEG, which of course has not yet been modelled.
Labor’s Mark Butler reminded us that most modelling, from the CSIRO, AEMC and others, showed that an EIS would be up to $15 billion lower over the course of the next decade.
- Garnaut, the eminent economist who spent considerably longer than 10 days producing the Garnaut Review, said that the Jacobs modelling cited by the Coalition and The Australian actually showed prices falling by a large amount under the Emissions Intensity Scheme, and more under the Clean Energy Target.”
Labor has, of course, dumped the EIS in order to end the climate wars by accepting Finkel’s CET.
The Business Council of Australia has now written offering itself as a “broker” to negotiations between the Coalition and the Labor Opposition. This sent Richard di Natale right off, saying the BCA is part of the problem.
It won’t happen, of course, Labor would never accept their help, being perfectly capable of negotiating on their own, if the government will in fact engage. Usually the Turnbull government restricts itself making loud and public demands without showing Labor the details.
However things are looking a bit cosy, with the BCA being headed by Grant King, former CEO of Origin, and the deputy chair of the ESB, Clare Savage, being the former policy chief of the BCA, and the Government getting answers to complex problems in almost no time at all.
As I’ve said elsewhere, federal Labor doesn’t actually have to agree with anything except the 26% emissions target, which they won’t.
This week’s Essential Poll is interesting in this regard. There is only mild comfort for Labor.
The NEG was approved by 35% of respondents and disapproved by 18%. However the big winner was ‘Don’t know’ with 47%.
As to the government’s plan to phase out subsidies to renewables after 2020, 32% approved, 41% disapproved and 28% said they didn’t know.
When asked whether the Government’s energy plan would reduce or increase power prices or would it make no difference, 31% said it would make no difference, 31% thought prices would go up, 16% said they would go down and 22% didn’t know.
People were asked six questions about which party out of the LNP and Labor would perform better on clean energy matters, Labor was ahead on four and equal on two. However, we are talking numbers mostly in the 20s. 34 to 39% said there would be no difference and 14 to 16% didn’t know.
If there is only mild comfort for Labor there is less for the LNP. Probably the election will be won elsewhere.
Ben Potter in the AFR (pay-walled) says the Labor states are leaving the door open to the National Energy Guarantee.
I heard Jackie Trad on talkback the other day. She said Labor would do what they were going to do irrespective of what Canberra did. She pointed out that the Newman government had destroyed any skerrick of state initiative on climate. However, the Palaszczuk government now had $5 billion worth of clean energy projects underway, in the pipeline or in prospect.
It seems the states will grumble a lot, and with good reason, but will probably use the cover of the price reduction to accept, hoping that Labor will win the election and raise the target. Labor could also initiate adjusting the regulated standard for ‘dispatchable’ electricity if it proves to be too onerous. Potter says that in any case this may be a pre-condition which enables the states to agree.
The NEG has significant support from the Clean Energy Council industry lobby, Bloomberg New Energy Finance, and some renewable energy generators, including Meridian Energy Australia and Infigen Energy.
Quite frankly, South Australia, Queensland, Victoria, and the ACT have shown what can be done with reverse auctions and state investment. Queensland has been told that with the NEG its renewables target of 50% by 2030 might cost up to $900 million dollars over a decade. I don’t know what the revenue in the electricity system is, but the scale can be judged by this graph of the value of transmission assets from the ACCC prices and affordability report:
Queensland comes in at over $25 billion dollars. Profits based on return on equity in Queensland go to the government, not to private corporations, some of them foreign. In this context, $900 million over ten years is chicken feed.
The advantage of running with the NEG is that business would have the certainty it keeps calling for, so they can reduce the risk premium in lending for investment.
Accepting the NEG is not ideal, but we have heard before about the perfect being the enemy of the good. Back in 2009 the Greens rejected the CPRS largely because it would see coal persisting into the 2030s. It is now clear that politics will need to wake up in fright and see climate change as the existential threat it actually is before we realise that fossil fuels, which made the modern industrial world, will also destroy it unless we take rapid action.