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Back To Black: Australian Govt Walks Away From Green Energy Targets

Financial Review

The Clean Energy Target as proposed by Chief Scientist Alan Finkel will be overhauled and replaced with a policy that will place much greater emphasis on coal-fired baseload power and possibly a slower transition to renewable energy.

At the same time, energy regulators and industry sources suggested there was no need to prolong the life of the Liddell Power Station in NSW and that energy shortfall created by its closure in 2022 could be met by other means.

AGL chief executive Andy Vesey told the government this during and after Monday’s meeting in Canberra at which he was pressured to sell Liddell or keep it open, rather than close it in 2022 and replace its generation capacity with gas and clean energy sources.

“The best way to address pricing challenges in the market is to increase supply. We’re investing more than anyone else in building new supply to drive down prices and stand ready to invest more when there is certainty on carbon policy,” Mr Vesey said.

Labor leader Bill Shorten concurred. “How can the government expect industry to decide on new generators if the government can’t even decide on a Clean Energy Target?” he said on Tuesday.

New policy

But the government all-but confirmed on Tuesday that it had moved away from plans to implement a CET and will instead unveil a policy which places a heavier emphasis on cheap and reliable power .

Energy Minister Josh Frydenberg said last week’s report by the Australian Energy Market Operator which highlighted an intermediate-term shortfall in baseload power if Liddell closed in 2022 had “reset the debate” and “placed a focus and a premium” on baseload and stability.

Mr Turnbull told Parliament “the real challenge to the reliability of the energy system is the failure of the current market system to take into account the importance of having baseload power”.

“We need to ensure that the energy market design provides a suitable framework for investment that doesn’t simply get new generation, but gets generation of the right kind,” he said.

“Because you have to keep the lights on, and you have to ensure that people can afford to pay to keep the lights on.”

Mr Turnbull insisted there could be a policy which kept coal burning longer but still enabled Australia to meet its 2030 emissions reductions targets.

Abbott approval

The shift was welcomed in the Coalition party room by Tony Abbott. He congratulated Mr Turnbull and warned there should not be a CET bolted on top of the existing Renewable Energy Target.

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