Prime Minister Malcolm Turnbull to make multibillion-dollar pledge to build new coal power stations
THE Turnbull government will underwrite multi-billion dollar investments to build new coal-fired power stations in a bid to lower energy bills. Today, Tony Abbott said, “If we’re serious about coal, keep Liddell open.”
NSW
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THE Turnbull Government will underwrite multibillion-dollar investments to build new coal-fired power stations in a bid to lower energy prices for Aussie families.
This major financial contribution to build new power generation assets, which could be coal or gas, is also a sweetener from Prime Minister Malcolm Turnbull to win the support of hostile Liberal MPs, like predecessor Tony Abbott, who have threatened to cross the floor on his signature energy policy, the National Energy Guarantee.
Finance Minister Mathias Cormann confirmed this morning that the government was accelerating the consideration of some key ACCC recommendations.
“In particular the Treasurer and the Environment Minister have written to the Prime Minister with a proposal to develop options to underwrite certain power generation moving forward in an effort to further assist in lowing energy prices and that is something that will be considered in the next little while,” he said.
Labor environment spokesman Tony Burke said Labor would not support underwriting coal power plants.
“We’re talking about whether or not something is a sensible investment again,” he said.
“We’re talking about whether something is economic and whether something is going to be the best use of tax payer money. A new coal-fired power station doesn’t tick any of the boxes.”
But Mr Abbott was not convinced the plan would back coal power and urged the government to force AGL to sell Liddell to the government.
“If we’re serious about coal, keep Liddell open. And it’s got to happen now,” Mr Abbott said on 2GB.
“A compulsory acquisition process needs to start now because I’m very suspicious of governments which demand something today on the basis of vague promises tomorrow.”
Mr Abbott labelled the NEG “seriously bad policy” flagging he would continue to oppose it.
“It doesn’t focus on reducing price which is really the only thing that counts. Its complete focus is on reducing emissions,” he said.
Nationals deputy Bridget McKenzie played down the number of malcontents in coalition ranks.
“I wouldn’t say there’s lots of people in the coalition agitating. I think the coalition is united behind reliable and affordable power,” she said.
Senior Turnbull Government sources have confirmed they would adopt the Australian Competition and Consumer Commission recommendation to financially underwrite investment in construction of new power stations in order to help large energy users — including mineral processors, chemical factories, plastic and paper manufacturers — which have been battling to operate amid the high cost of electricity and gas.
While the power stations will be built specifically for the use of the largest energy users in the country, it will help lower power prices, a senior Government source said. “The focus is on getting cheap power into the system. It decreases prices for everyone,” he said.
It will also eliminate the control which power retailers like AGL, Origin and Energy Australia have over the market.
The move is designed to ward off the potential for powerful backbenchers, including Mr Abbott to cross the floor over the NEG, as they push for the government to focus on a price-target, not only an emissions and reliability target.
Energy Minister Josh Frydenberg yesterday made a public plea to disaffected backbenchers to engage in “constructive discussion”.
“They know how hard this is, and they know that Australia needs to break with the impasse that has dogged this policy in the past,” he said.
“My colleagues have been briefed by the miners, the manufacturers, the farmers and the industry groups who say this is the only game in town to reduce people’s power bills.”
The Daily Telegraph understands Mr Turnbull will announce his support for the idea at tomorrow’s Coalition party room meeting as a “way to get everyone on board” with the NEG.
He will tell the Liberal and National MPs the many billions of dollars will be used to underwrite long-term investment in building new generation assets, whether they are coal, gas or renewables, in order to create a level-playing field.
The condition is that the finance will be provided to create reliable power.
A senior source said it was “not NEG-plus” and that it would be technology-neutral because the government did not want to spook Labor states.
“We see this as a way through that satisfies everyone,” the source said. It will also be pitched as possible fix to the supply shortage facing NSW following the closure of the Liddell coal-fired power station in 2022.
Treasurer Scott Morrison and Mr Frydenberg are still working on the precise details of the proposal to hand to the Cabinet’s energy subcommittee in a month.
Labor states last week demanded Mr Turnbull get support for the policy through the Coalition party room before tomorrow’s phone hook-up of the nation’s energy ministers.
Resources Minister Matthew Canavan last month sent Nationals MP George Christensen on a industry-funded mission to woo Japanese investors to build high efficiency, low emission power station in Australia.