Malcolm Turnbull to unveil ‘affordable’, ‘reliable’ energy strategy to cut household power bills
AUSTRALIAN Prime Minister Malcolm Turnbull has suggested household power bills would fall under his new energy policy, but he couldn’t guarantee it.
AUSTRALIAN Prime Minister Malcolm Turnbull has suggested household power bills would fall by an average $110 to $115 a year from 2020 under his “game-changing” plan.
But Mr Turnbull dodged questions on whether he could guarantee the average household power bill would come down about $115 per year from 2020 to 2030.
He passed the question to Australian Energy Market Commission chairman John Pierce, who said more detailed modelling on how power bills would be affected would be completed by the next COAG.
But he said more investment certainty, higher competition and possibly new players in the market would put downward pressure on prices.
In releasing the government’s national energy guarantee, the prime minister said it would deliver affordable and reliable power while cutting emissions.
“No more industry policy ... no more favouring one technology after another, but simply ensuring that we have a reliable energy system, that we keep the lights on, that we do so in a way that is affordable and, of course, we meet those international commitments,” Mr Turnbull told reporters on Tuesday.
The plan includes a reliability guarantee that will be set to deliver the right level of dispatchable (when it’s most required) power - from sources such as coal, gas, pumped hydro and batteries - needed in each state.
The level will be set by the Australian Energy Market Commission and Australian Energy Market Operator, and penalties for retailers missing the guarantee have yet to be determined.
An emissions guarantee will be set to meet Australia’s Paris reduction target, requiring legislation to pass parliament and enforced by the Australian Energy Regulator.
“This is a very significant game-changer in energy policy,” Mr Turnbull said.
One hurdle to the plan could be getting parliamentary support for the target trajectory for emissions, which Energy Minister Josh Frydenberg said would be a 26 per cent reduction in emissions on 2005 levels by 2030 - Australia’s Paris target.
The state governments have been considering adopting their own separate clean energy targets, but will be briefed on how the federal plan is better and asked through the Council of Australian Governments to endorse it. Discussions will also be held with Western Australia and the Northern Territory which are not part of the national energy market.
HOW THE PLAN WORKS
Energy retailers such as AGL, Origin and Energy Australia would face deregistration from the market if they failed to meet a new “emissions guarantee” included in the government’s strategy.
The mechanism - one of two new obligations for retailers - would force the energy companies to source a portion of their supply at a set emissions level.
If they persistently failed to meet their obligations - which would be set by the federal government and enforced by the Australian Energy Regulator - they would be deregistered.
The mechanism is designed to help the government meet its international commitment to reduce greenhouse gas emissions, while also allowing the government to scrap subsides for green energy and dump the proposed Clean Energy Target.
Energy companies would also be forced to meet a “reliability guarantee” designed to prevent blackouts as part of the new policy.
Under the mechanism, retailers would be forced to provide a set amount of power from generators that could immediately respond to requests to increase or decrease their power output to meet market demand in real time.
It doesn’t specify the type of generation, so retailers could source power from existing plants or renewable technology with storage capacity.
State Premiers will be urged to sign off on the federal government’s new energy plan - which will also set a national emissions reduction target - at the next Coalition of Australian Governments.
The national target will be to reduce emissions by 26-28 per cent on 2005 levels by 2030, as per the Paris Accord.
Energy Minister Josh Frydenberg will entice the states to sign on by showing them modelling on how much the new strategy could reduce power prices in the state.
The modelling is being prepared ahead of COAG.
TURNBULL ‘SHIRT-FRONTS’ ABBOTT
MALCOLM Turnbull has “shirt-fronted” Tony Abbott over energy policy, according to one Coalition backbencher.
The unnamed MP told Sky News the backbench overwhelmingly supported the Prime Minister’s new energy strategy in a joint party room meeting today.
The MP described it as the Prime Minister’s “shirt front” to Mr Abbott, who is understood to have asked for a “political discussion” on the policy after experts finished speaking at the meeting.
Another senior Liberal told Sky News Mr Abbott’s call for discussion was a transparent attempt to delay a decision on the strategy that ultimately failed.
Mr Abbott arrived 12 minutes late to Question Time. Shouts from Labor MPs on his arrival briefly drowned out Energy Minister Josh Frydenberg, who was speaking about the new energy policy.
In a video posted to social media immediately after the meeting, Mr Turnbull said the strategy that had been agreed on would deliver lower prices, more reliable power supplies and help Australia meet its international commitments to reduce greenhouse gas emissions.
“Energy companies will have to guarantee the reliability of their energy supplies to ensure the lights stay on.
“These guarantees will ensure there is a place for all power sources in the nation’s future energy mix: solar, wind, coal, gas, batteries and pumped hydro.
“Our plan has no subsidies, no certificates - and no tax.
“It doesn’t involve the Government picking winners; it truly is technology neutral.”
Mr Turnbull told reporters in Canberra the policy the government had settled on - a National Energy Guarantee - was the “lowest cost way of keeping the lights on”.
The plan was recommended by the independent Energy Security Board.
TURNBULL DOES A TRUMP
Earlier today, he was accused of effectively following Donald Trump in pulling Australia out of the Paris Agreement on climate change.
Greens leader Richard Di Natale dubbed the Prime Minister “cowardly” when he made the accusations today before the government unveiled its new energy plan.
The strategy, which is believed to have been signed off by the Coalition backbench today, will reportedly slash power bills by $115 a year, dump the proposed Clean Energy Target, and scrap subsidies for renewable technology.
“Malcolm Turnbull has done what Donald Trump has done he has just not done it as extravagantly,” Senator Di Natale told Sky News this morning.
“He has effectively pulled out of the Paris Agreement; we can’t achieve those reduction targets based on this plan.”
Senator Di Natale accused Mr Turnbull of caving to pressure from Tony Abbott and other outspoken backbenchers.
ONE NATION TAKES CREDIT
Meanwhile, One Nation has claimed credit for the government’s renewed focus on coal and its intention to drop subsidies for renewable energy technologies after 2020.
“We have got ‘affordability’ now in the energy debate due to our work, we have got ‘reliability’ into the energy debate due to our work, we have got ‘security’ into the energy debate due to our work,” One Nation Senator Malcolm Roberts said.
But Senator Roberts questioned the government’s claim power prices would fall by $115 a year.
He said power prices would likely spike in the short-term as the government ramped up the Renewable Energy Target before it was killed off in two years.
“We’ll see $115 less than what it will be — and what it will be is frightening,” he said.
The Queensland senator also echoed the Greens claim the government would not be able to meet its emissions’ reduction target.
“How the hell are they going to comply with the Paris Accord without renewables?
So what are they going to do? “They need to come clean.”
BISHOP: IT’S A GAMECHANGER
Ahead of the party room meeting today, Deputy Liberal leader Julie Bishop said the government’s new energy plan would be a “gamechanger” that would push down prices and allow Australia to still meet its international commitment to cut greenhouse gas emissions.
She urged Labor not to immediately reject the plan but “listen to the experts”.
“This is a very secure way of ensuring reliability, affordability and meeting our Paris commitments,” Ms Bishop told ABC radio.
“It doesn’t require a Clean Energy Target, it doesn’t require a Carbon Tax, it works on market mechanisms and it will drive prices down.”
Ms Bishop rejected suggestions the plan had ignored the key recommendation of Chief Scientist Alan Finkel for a Clean Energy Target after pressure from the backbench.
She said the government’s plans built on Dr Finkel’s report.
Dr Finkel has welcomed the government’s National Energy Guarantee.
The Chief Scientist, whose recommendation of a Clean Energy Target was rejected today in favour of the new model, said: “I think it’s fine.”
Dr Finkel said it appeared the NEG would address the three major outcomes he had called for - a pathway to reduce emissions, a credible tool to manage the process, and a tool to address reliability issues.
He told reporters in Canberra today there was “more than one way to skin a cat”.
And while he had not modelled the government’s NEG, he believed it would have a similar impact on power prices to the CET.
State premiers should be aware the plan was “logical,” he said.
The Opposition’s climate and energy spokesman Mark Butler did not say whether Labor would support or block the NEG, but said more credible modelling needed to be done before the party could make a decision.
“Until we’ve seen some real modelling, at the moment all we’ve got is a vague promise of a 50c per week saving in three years’ time which might creep up to $2 per week in a decade,” he said.
Mr Butler slammed the lack of consultation with state and territory governments.
Ms Bishop called the plan, recommended by the new independent Energy Security Board, a win for Australian consumers.
The head of the coalition’s backbench energy committee, Craig Kelly, who was briefed on the new approach after a cabinet meeting last night, welcomed the focus on dispatchable switch on/switch-off power this morning.
“The problem with solar and wind, as wonderful technologies as they are, when there is no wind you get no electricity generation and as soon as the sun sets you also get zero electricity generation as well,” he told ABC radio.
“So as good as technologies as they are, you’ve got to have them backed up in some way and that’s either got to be a coal-fired power station, a gas generator or some form of battery.”
He defended the idea to ditch the clean energy target, as recommended by Dr Finkel.
“The Finkel report contained 50 recommendations. If we’ve recommended 49 that’s a 98 per cent strike rate,” he said.
The annual benefit from the CET came in at $90 a year for households, while large industrial users were expected to pay about 20 per cent less a year. At the same time, the modelling showed the new mechanism would enable Australia to achieve its commitment of a 26-28 per cent reduction in 2005 emissions by 2030.
Blackouts would be minimised with power generators and storage providers, such as hydro and batteries, covered by a new “generator reliability obligation”, as recommended by Dr Finkel.
Adequate dispatchable power would be required in all regions of Australia to ensure consumer demand is met, with the obligation being met using a variety of technologies.
Power prices have risen in real terms by 63 per cent during the past decade.
Labor leader Bill Shorten has criticised Malcolm Turnbull for backflipping after endorsing a clean energy target only four months ago.
“Why on earth did we ask the chief scientist of Australia to give us a report,” he told reporters in Canberra.
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