If you want to peer through a window on to what ails the energy debate in this country at a policymaking level, look no further than the just-released report by a Senate committee in to “the resilience of electricity infrastructure in a warming world.”
This 176-page report purportedly from a committee chaired by the Greens’ senator, Sarah Hanson-Young, includes some 90 pages of dissenting commentaries by member senators from Labor, the Coalition, Nick Xenephon and One Nation.
The Labor dissenters’ bit comments that “this inquiry presented a unique and timely opportunity to articulate a policy vision for Australia’s energy future” which has not been grasped.
Even if you raise an eyebrow at “unique,” it was certainly a timely opportunity for the body politic at a federal level to pursue some commonsense common ground – and it has yet again left the players in a tangled, squabbling heap.
On the other hand, as the Labor dissenting report observes, “almost every witness” at the inquiry agreed that failure to articulate a plan to transition to a low-carbon future is crippling the energy industry.
(This, of course, is the Turnbull government’s fault, the Labor crew assert – to which the only possible response is “look in the mirror.”)
As witnesses from AGL Energy told the committee: “Market participants need time to plan. There are often five to 10 years in a planning horizon and we need some sort of predictability of when to replace assets to avoid the disorderly transition we are experiencing today.”
Whether or not, as Frontier Economics claimed to the committee, the present situation represents an “investment strike,” it is so manifestly untenable that the willingness of politicians to continue to eschew seeking common ground in favor of shouting at each other (literally in some cases, see Weatherill versus Frydenberg) is almost (but not quite because we have seen it all before) beyond belief.
The Turnbull government, via the dissenting comments of the Coalition members of the committee, dismisses the Hanson-Young version of the report as “so biased it could have been written before the inquiry even commenced.”
Interestingly, the government senators comment that it is “beyond (our) comprehension” that South Australia, Victoria (where the Liberals and Nationals are far from blameless) and New South Wales (with the Coalition in office) could impose moratoriums on exploration and extraction of onshore natural gas in their States in the face of supply shortages and rising energy prices.
Accepting that the Coalition’s contribution will have been vetted by the government, and leaving aside the ritual bashing of Labor positions (and vice versa in the Labor contribution), it is perhaps notable that these senators make it clear the Turnbull administration is (a) determined to pursue “technology agnostic” policy, (b) is unwilling to be party to driving coal generation out of the NEM and (c) is depending on the Finkel task force to draft “a long-term national blueprint” for the energy sector. They “refute the (inquiry main report) suggestion that the Finkel review is not focused on the stable supply of electricity in the future.”
They also push the argument that the existing RET “acts as a tax on energy consumers and is causing electricity prices to rise significantly.”
Given his pivotal role (along with other NXT senators) in the make-up of the present Senate, it is also be worse noting Nick Xenephon’s comments in his dissenting report.
In part, he accuses Hanson-Young of “making a fundamental error” in seeking to pit renewable energy against gas generation. The Greens’ approach, he declares, would see “energy prices driven so high and reliability driven so low that it will lead to a damaging de-industrialization of the economy.”
To ensure power affordability, he adds, gas must be used as a transitional energy until renewables can offer the affordability and security that consumers and businesses require and expect – and pursuing this requires embracing a scheme where high emission generators buy credits from low and zero emission power producers.
Part of Xenephon’s approach would see the federal government imposing a public interest test on future new gas exports along with a “use it or lose” approach to corporate gas resources and, in the interim, prohibiting companies with current LNG contracts from buying up further domestic gas supplies to meet export needs.
He also wants “urgent reform” of NEM rules to ensure investment certainty and to drive greater reliability, grid stability and lower prices.
When they are not simply bashing their party’s political drums, the Labor senators want the AER and AEMC “to consider reviewing existing policies” – neither entity is actually in the policy-making business – to give “clear guidance” on “prudent investment” by networks to protect themselves against climate change risks. Perhaps the official ALP spokesman could tell us what this means – and even hazard at guess at the costs that would inevitably flow through to consumers.
The Labor senators also advocate “ongoing support for emerging technologies to overcome technical and regulatory hurdles to entering the market” but say not a word in their recommendations about a 50 per cent renewable energy target in 2030, which is supposedly the federal party platform. Room here, too, for more clarification from Shorten and others.
And they speak up for “stable and consistent policy (such as an emissions intensity scheme)” to support investment in new power infrastructure.
As well, they want a plan for “an orderly exit of ageing generators” from the NEM.
So, yes, the Senate report is another window on the dog’s breakfast that is the policy discussion between politicians and perhaps reinforcement of the necessity of the Finkel inquiry – but the question it underscores is what hope do we have, when Finkel has landed, that the federal government, the State governments and the federal Labor opposition can come to a meaningful agreement on any forward path the task force recommends? Buckley’s on this evidence.