By Nick Toscano
Major investors have clashed with the Coalition ahead of the federal election, warning that slowing the rollout of renewable energy will push up electricity bills by increasing the need to call on failure-prone coal plants and expensive gas-fired generators.
Debate about Australia’s clean energy shift has been thrust to centre stage as Opposition Leader Peter Dutton campaigns to limit renewables to 54 per cent of the electricity grid and build a fleet of government-owned nuclear generators across the mainland.
Opposition Leader Peter Dutton and Prime Minister Anthony Albanese are at odds over the country’s energy future.Credit: Rhett Wyman, Getty, Alex Ellinghausen
If it wins the election, the Coalition would roll back Labor’s 2030 climate commitments, including its target for renewables to make up 82 per cent of the grid by 2030, which experts believe is unlikely to be met.
However, in a significant intervention, a group of large investors including US asset giant BlackRock, France’s Neoen, Australia’s Macquarie Bank and the Andrew Forrest-backed Squadron Energy has ramped up its push against policies that would restrict the expansion of wind and solar and keep the grid heavily tied to fossil fuels for longer.
“Australia needs more renewables, not less, to achieve sustained power price reductions,” said the Clean Energy Investor Group, which represents 18 global and local investors with a portfolio value of $38 billion across Australian renewable projects.
Households have been hit with double-digit power bill increases since 2022, the year that Russia’s invasion of Ukraine unleashed a global energy crunch. Another power price rise, partly due to recent stretches of low wind and rain limiting renewables’ output, is set to take effect in Queensland, NSW and South Australia from July this year.
But bills would be up to $417 a year higher if not for renewable energy and batteries, the investor group’s analysis shows, as utilities would be forced to more frequently fire up their gas-powered generators, which are among the most expensive suppliers to the grid.
Separate industry modelling released last week by the Clean Energy Council suggests the Coalition’s push to limit renewables would require at least a three-fold increase in gas-powered electricity costs by 2030.
Investors have also expressed concern at the Coalition’s proposal to extend the lives of ageing coal-fired power stations beyond their closure dates in the 2030s and 2040s until nuclear plants were ready to replace them, which could raise risks of sudden breakdowns, power shortages and price spikes.
“Running a grid using fossil fuels rather than renewables would increase total system costs, weaken energy security, and place greater strain on ageing coal and gas infrastructure,” the investor group said.
Opposition energy spokesman Ted O’Brien said it was no surprise that a peak body for renewable energy investors had released a “hyper-political” document favouring renewables.
“Vested interests will always talk their own book,” he said. “But what’s disturbing is that Labor has been totally captured by them.”
The Coalition argues that baseload power from either a coal or nuclear plant must be a crucial part of a “balanced energy mix” that would also include renewables, batteries and gas, to achieve net zero emissions by 2050.
“Labor’s all-eggs-in-one-basket renewables-only policy is driving prices up and increasing the risk of blackouts, leading to record levels of insolvencies and families on hardship arrangements,” O’Brien said.
“Nuclear and renewables are natural partners which work together with gas to keep prices down and the lights on as economies decarbonise.”
However, many industry leaders, the CSIRO and top energy officials have cautioned that nuclear is a “comparatively expensive” power source that would take too long to deploy in time to replace coal-fired power stations, at least half of which are scheduled to shut within 10 years.
‘The idea that we can wait for nuclear and prolong coal and gas will be severely detrimental to power prices.’
Clean Energy Investor Group chief executive Richie Merzian
The Albanese government, meanwhile, follows the advice of the Australian Energy Market Operator, which determines that the best and lowest-cost transition from coal towards net zero is to develop a grid dominated by renewables, backed up by extra transmission lines, storage assets like batteries and hydroelectric dams, and gas-powered generators.
Clean Energy Investor Group chief executive Richie Merzian said investors welcomed the bipartisan support for reaching net zero by 2050, “but that seems to be where things begin to split”, he said, as the government and opposition were charting “very different pathways to get there”.
“Renewables are delivering,” Merzian said. “The idea that we can wait for nuclear and prolong coal and gas will be severely detrimental to power prices.”
With the right policy settings, private investment was “ready to assist” government efforts to ensure Australia’s smooth transition away from a coal-dominated grid, Merzian added.
“But policies that undermine confidence and freeze renewable energy investment mean the taxpayer will end up footing the bill for energy production, and will then have to pay higher power prices as well,” he said.
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