Deal or no deal?

On energy (and much else), the Guardian newspaper is as green as grass, but a weekend commentary on the Turnbull government’s latest approach to energy policy by its Australian political editor, Katharine Murphy, contains this plea: “Can all the key players in our political system be grown-ups, rise above frustrations, past botch-ups and petty intrigues, come together to consider an issue on its merits and ultimately act in the national interest?”

Cynics will opine that, for this to happen, there will need to be an Olympic-standard triumph of hope over experience, but I am also interested to see another senior political writer, Malcolm Farr of News Limited, canvassing the prospect that the “national energy guarantee” may be a route to “peace in our time” after 10 years of “fractious debate and policy failure that have consumed five prime ministers.”

As one would expect, the hills and valleys of our media are alive this weekend with the sound of chin music on the NEG theme and much of it metaphorically will soon be wrapping fish and chips, but there are other bits in the public arena of some value.

One I recommend is the transcript of a Canberra breakfast forum organized on Thursday by the Australian Industry Group. Snippets from this event have appeared in the media but the full report of the presentation at the National Press Club by Malcolm Turnbull — and the ensuing Q&A session that also featured Kerry Schott, chair of the Energy Security Board, Audrey Zibelman of AEMO, John Pierce of AEMC and Paula Conboy of the Australian Energy Regulator — is worth reading. It’s on the media segment of the Prime Minister’s official website.

Turnbull told this forum that the new approach recommended by the ESB “will guarantee reliability, restore stability and confidence to the energy market” and “we can expect lower prices than under any other approaches.”

Do note the last bit.

The Prime Minister referred a little later to the NEG “placing downward pressure on wholesale (power) prices,” adding the ESB has told the government to expect wholesale prices to be 20-25 per cent below current forecasts in the period from 2020 to 2030. “Now, that is 8-10 per cent below what was expected under the Clean Energy Target and translates into an average $100-115 fall in residential power bills a year in the same period.”

Given the media penchant for beat ups via aggregating the impact of power bill rises – I recall The Age during the Gillard prime ministership actually using “shock” and “horror” in a headline about an aggregate rise of $40 million a year for Victoria’s two million residential accountholders – I am a little surprised that Turnbull & Co have not thought to point out that, at $100 a year per household, the NEG could deliver something like $8.5 billion in relief to NEM householders between 2020 and 2030.

And, while on this aspect, it was good to see Paul Kelly in The Weekend Australian calling out Bill Shorten & Co for being “brazen beyond belief” in bagging the lack of Coalition modeling of the NEG while continuing to duck producing economic analysis of their proposal for a 45 to 50 per cent renewable energy target for 2030. The sloth and incompetence of the political commentariat in not pursuing Labor relentlessly for this modeling has been a feature of the past two years of the energy debate.

Coming back to the AiG forum, the AEMC chairman had an interesting retort to a question about modelling the NEG.

“Models don’t give you truth, right,” Pierce said. “Good models give you a set of conclusions that are consistent with the assumptions you put into them but, more importantly I think, they teach us something about the relationships within what you’re looking at.

“And one of the things that I would hope would come from further work is the deeper understanding about how the mechanics of these (NEG) mechanisms will operate in the future.

“If I can have a bit of a personal vent,” he went on, “one of the things that has frustrated me about this debate for a long time is people forming views and judgments about the virtues or otherwise of different policy mechanisms based on what some model says will be the technology that will be on the ground in five years’ time, seven years’ time, 10 years’ time rather than will this policy mechanism deliver the policy objectives and are those objectives clear?”

One of the things about which we can be sure, Pierce added, is that the views around technology costs in 12 months, in 18 months and in two years’ time will be completely different and “that will give you a different result when you chuck it through these models.”

His appeal is for a focus on the NEG and how it works and whether it achieves the policy objectives “because that’s really the test, irrespective of whatever the future may bring in terms of technology costs or gas prices or coal prices or any of the other myriad of things that drive outcomes.”

Whether this sort of thinking can prevail among political leaders when the modeling the Coalition is seeking is delivered in mid-November for CoAG consideration remains to be seen. Our energy politics being as toxic as they are, the answer is probably not – but Murphy’s challenge can’t be answered unless this does happen.

Contained in the AiG forum transcript is this plea from Turnbull to the Labor opposition: “They don’t have to have the indignity of supporting a proposal prepared by me and Josh (Frydenberg) and Scott (Morrison) and Barnaby (Joyce). This has come from the Energy Security Board, established with outstanding leaders on it by CoAG. More Labor jurisdictions were part of that decision than Liberal ones. The (ESB) membership was applauded by the federal opposition.

“I think this is a real opportunity for Labor to say: ‘Well, we’ve always said we wanted to have a bipartisan approach. We got the recommendation from a board that was set up on the recommendation of Alan Finkel. It was established by CoAG. Let’s take their advice.’ I think it is pretty straightforward and it is about time for some commonsense to break through all the politics.”

This got him a challenge from the forum floor from the Guardian’s Murphy: “Are you going to stow the rhetoric, get people around the table and actually cut a deal on this stuff? Or are you going to basically comply with the wishes of some in the Coalition who just want another zero-sum pathetic round of blame shifting with Labor at the next election? What’s it to be?”

The response she got at the time (surprise, surprise) was waffle, but her question should have a life beyond that breakfast meeting – it goes to the heart of achieving a step change in this debate.

Are the Labor people up for it? Are Turnbull and his ministers?

The Prime Minister finished up the forum by appealing to the business community to get on the backs of the State and Territory governments to support the NEG.

Different politicians can argue about who is most to blame for the massive energy policy failure of the past decade, he said. Adding, in a quote the media picked up because they will always go for the biff: “Too much ideology, too much idiocy or absence of mind, whatever you want to call it. Let’s now use economics and engineering as our guides.”

And, reverting to statesman mode: “We’ve got some great advice from an independent expert board. Not appointed by the federal government – appointed by CoAG, so by all governments. We put them there to seek (their) advice. Let’s now take it.”

Let’s see what the month ahead now brings.

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