At last, an energy policy for the market, not the carbon doomsayers

The Prime Minister’s National Energy Guarantee is a return to market disciplines.

Voters and politicians want the easy options on renewable power and greenhouse gas reduction. They support both but don’t want to think about what they cost and how they affect power reliability. They want results now from plans meant to work over four decades.

As Newspoll showed last Monday, 63 per cent of voters want renewables subsidies to continue but 58 per cent do not think they should have to pay more for power.

Just about the only constant on the issue in the past 15 years has been by this paper, which has understood the science of carbon dioxide and atmospheric warming, questioned whether computer modelling was over-estimating warming (as many scientists have for several years) and pointed to other effects driven by the ocean but not yet fully understood. It has advocated least cost abatement linked to measures in the rest of the world, the position taken by John Howard to the 2007 election.

After what environment editor Graham Lloyd described here on Thursday as a decade wandering lost in the desert, the Turnbull government’s new National Energy Guarantee is back close to where we started, with a plan to minimise price pressures, ensure system reliability and meet international CO2 commitments as cheaply as possible.

Andrew Bolt and fellow Sky News commentators initially demanded last week that Prime Minister Malcolm Turnbull abandon his Clean Energy Target. When he then announced his new policy axing the CET, they segued to criticism that anticipated savings to consumers of $100-$115 a year were a smokescreen. It took until Thursday before they started attacking Labor’s more expensive plans.

It was surprising Turnbull focused on a small price saving in three years that even his main adviser Kerry Schott, chair of the Energy Security Board, said on Lateline last Tuesday could not be guaranteed. He should have focused on the threat of widespread blackouts.

Probably the only two people with more different positions on climate and energy policy than Turnbull are his main rivals — Abbott and Opposition Leader Bill Shorten. While conservatives were demanding the Government walk away from its Paris climate accord commitments to reduce CO2 by 26-28 per cent on 2005 levels by 2030, there was no acknowledgment it was actually Abbott in 2014 who committed to Paris.

Shorten has supported former Labor PM Kevin Rudd’s Emissions Trading Scheme and Carbon Pollution Reduction Scheme, Julia Gillard’s carbon tax and his own carbon intensity scheme until — after initial criticism — he fell in behind the government’s Finkel report recommending a Clean Energy Target. Labor was initially critical of the new NEG but by Thursday The Sydney Morning Herald national affairs editor Mark Kenny was predicting it would end up backing the plan.

Politically Labor is vulnerable on price and reliability if it continues with its commitment to a 50 per cent renewable target by 2030 and a 45 per cent reduction in total emissions on 2005 levels by that year.

Turnbull could have — should have — wedged Labor on climate policy at the last election but failed to. After the South Australian statewide blackout in September 2016 a federal campaign on blackouts and the cost of Labor’s renewables commitment could be potent. Even if Shorten accepts the NEG there is no guarantee the Labor states will.

A piece by Robert Gottliebsen in this paper on Thursday highlighted the shortfall coming on “dispatchable” power — power that can be accessed by the grid quickly — and the likely effects it will have on supply. Moving away from the CET was less about responding to Abbott and Shorten than to the Australian Energy Market Operator report on looming blackouts after the proposed closure by AGL of its Liddell power station in the NSW Hunter Valley in 2022.

Gottliebsen published a graph showing SA power from February 6 this year. On February 7, 91 per cent of SA’s power was wind and solar. By February 8 it was 3 per cent. Queensland, the world’s biggest coal exporter, and Victoria have committed to follow the SA example. The national grid can use intermittent power but must offset unreliability with dispatchable power, including, one day, batteries.

Queensland, once the state with the cheapest power and with enormous gas exports, now has the nation’s most costly power. All this to appease Greens voters to Labor’s left, at the expense of coal industry workers affiliated with Labor.

The media is full of half truths about power and climate change so here is my list of things to remember when you feel you are being told what Abbott described in 2009 as “absolute crap”.

● CO2, the food of all plants, does heat the atmosphere but the latest peer-reviewed science in Nature Geoscience confirms what this paper has said for a decade. The models have overcooked the warming. Why so little reporting of last month’s revelations about this apart from in The Australian?

● Australia makes only 1.4 per cent of global CO2 emissions and is not the major per capita emitter. The oil states of the Middle East are.

● Stop listening to anyone (from Fairfax, the ABC or Guardian Australia) who says policy decisions here are risking the Great Barrier Reef. To the extent coral bleaching has any connection with man- made CO2, that gas mostly comes from activity outside Australia, largely in the northern hemisphere.

● Coal is not being phased out around the world. Not only are Germany, Japan and South Korea building new coal-fired power generators, 1600 new such plants are either in scope or under way around the world.

● China is not walking away from coal. It has shelved about 100 coal plants in the polluted east of the country but accelerated new plant construction in the more sparsely populated west.

● Australia is home to 40 per cent of the world’s uranium and is the largest exporter. While building power stations has never been a federal responsibility there is a more compelling case for ­federal investment in nuclear generation than in another coal-fired plant.

● Labor’s plans from 2008-13 always foresaw gas as a transition fuel. Gas is less carbon intensive than coal, and gas generators are faster to fire up. State government greed (Queensland) and vanity (SA and Victoria) are making gas less viable. CSG has revolutionised energy generation in the US, safely, and cut prices and emissions .

● Destroying our cheap power advantage has shut many electricity-intensive industries here and exported them overseas for no net benefit to the planet. Not all CO2 comes from power generation and most manufacturing contributes CO2 to the atmosphere.

● Abbott was right in his London speech earlier this month that cold kills more people each year worldwide than heat.

● The NEG is a return to market disciplines. The centrally planned RET of Labor and Abbott relied on massive taxpayer subsidies. So would the CET.

Finally, while battery storage has always been the long-term answer to intermittent power problems, that technology is not here in quantity. SA is paying a fortune for a Tesla battery that will be able to power the state for only a few minutes. Like everything in this debate, a slow ramping up is the friend of good policy.