Carrying power fears to polls

If you wanted to come up with a core perception about energy among the mass of our population as 2017 winds down, it might be that, to quote a letter writer to a regional newspaper this week, “there shouldn’t be an energy crisis in Australia.”

This comes with the community-wide understanding that 20 years ago we had some of the world’s cheapest electricity prices for consumers large and small and now we don’t.

Analysis of public opinion published by Roy Morgan Research this weekend shows that the “energy crisis” is now the single biggest domestic issue on the minds of Australians, attracting 14.2 per cent of reactions versus, for example, 7.5 per cent for unemployment.

I suspect all the rhetoric about this from politicians and key players washes right over the broad community; “just fix it” is the mindset of the masses. (And Roy Morgan finds “lack of vision” by politicians is the biggest worry for 5.5 per cent of respondents.)

Regrettably, the cliché of choice for those charged with dealing with energy matters is correct: there is no silver bullet – still less so when the actual challenge is to make energy not only more affordable but also reliable and there is a further political necessity to apply greenwash. As I saw a lawyer write in the past week, “The energy mix is a policy decision but, regardless, what everyone needs is reliability at a reasonable price.”

Right now the federal theatre is consumed by the drama of the right of a raft of MPs to sit in Parliament House, Canberra, an issue that has morphed in to debate about Malcolm Turnbull’s capacity to stay Prime Minister and could, it seems, take us to a point where the Coalition loses government next year. This leaves the “energy crisis” caravan suddenly parked at the pavement, a situation that could change again if summer brings a threat to power supplies in the eastern States.

In the meantime the citizens of Queensland are at the polls, two months before they expected to be (because the timing suited Premier Annastacia Palaszczuk), the first major election to be held since “energy” and “crisis” became joined in politics and the media.

The State election outcome is anyone’s guess, in part because of the possible impact of One Nation and other minor parties. What is obvious some two weeks before Queenslanders vote is that quite a large number of them, significantly those in the State’s central and northern regions, especially farmers and small business people, are fed up with (and, in some cases, frightened by) their power bills.

The attitude is summed up by the head of the peak sugarcane growers’ association, who declared this week that “farmers are desperate to find a solution to the rising costs and unsustainable electricity prices.”

Dan Galligan says: “This is becoming a real crisis moment for people in business in Queensland, not just irrigators, but anyone who relies on electricity which is almost every business. For us, as an exporting industry trying to compete with overseas countries that are often under subsidized pricing regimes for the products they grow, we really have to manage costs.”

Queensland Farmers’ Federation president Stuart Armitage, while noting that it is “encouraging” that the contending State political parties are all releasing energy policies and making positive commitments, says what is needed is a “holistic solution” and that the next government must be willing to look beyond one or two areas and commit to a longer-term agenda for an electricity “fix.”

As well, the Chamber of Commerce & Industry Queensland is expressing concern that this month could see a demand peak similar to last February’s heatwave requirement when the State capacity reserve got uncomfortably tight. The Palaszczuk government is promising that it will have the mothballed Swanbank E power station (gas-fuelled) back online by New Year’s Day but CCIQ is fretting that the weather could bite supply before then.

The business association asserts also that 170,000 State jobs are at stake if the energy price problems are not addressed.

The Liberal National Party is promising to restructure the government-owned supply sector yet again, to write down the network asset base by $2 billion and to back construction of a new, 750 megawatt coal-burning power plant in North Queensland – while Labor opposes the FNQ plant and spruiks its plan to have 50 per cent of Queensland electricity supply from renewables by 2030. It is also offering to give households and small business a $300 million discount on power bills while the LNP offers a rebate to farmers.

Former federal Energy Minister Ian Macfarlane, now heading the Queensland Resources Council, argues that building the coal plant will (eventually) “bring down prices for everyone” because of its impact on wholesale costs.

Entirely predictably, Labor has tossed the power privatization card on the table despite the LNP swearing blind it won’t contemplate the move again after doing so helped sweep it from office in January 2015.

(In passing, in the process of pushing State Labor to rule out gas exploration and production bans in the Cooper Basin, the Australian Petroleum Production & Exploration Association has provided some interesting numbers on the contribution of the upstream petroleum industry to Queensland. APPEA says this amounts to 60,582 jobs in 2016, generating $12.8 billion in State economic activity and, in 2017-18, contributing an estimated $885 million in State royalties.)

Come what may in Queensland on 25 November and what may in federal politics between now and about Easter, the energy policy choice (to quote the Grattan Institute) remains between a rare outbreak of bipartisanship or a depressing continuation of current trends delivering the worst outcomes for, in particular, eastern Australia.

For the mass markets and consumers like manufacturers and farmers, the prime focus remains on what they are paying – with new UBS analysis forecasting wholesale power prices will remain relatively high out to 2020 on the back of $8 to $10 per gigajoule gas prices.

Comments are closed.