NSW hits out at energy laggards
NSW Energy Minister Matt Kean launches a blistering attack on the nation’s big electricity generators for pulling back on investment decisions.
NSW Energy Minister Matt Kean has launched a blistering attack on the nation’s big electricity generators for pulling back on investment decisions, arguing they were making super profits and should “get out of the way” if they don’t like the state’s controversial energy policy.
AGL said the state’s energy road map — which aims to attract $34bn in private investment spread through renewable energy zones — meant it would have to defer and review its Newcastle gas plant and giant battery at the Liddell coal station as it sought to understand the implications of the policy.
Big energy producers and users had already raised fears over a plan by the NSW government to underwrite investment in renewable and storage generation, saying the move would distort market signals and detract from a national approach already under way.
Adding to pressures, EnergyAustralia on Monday delayed a final investment decision on its planned $400m Tallawarra gas plant in NSW amid heightened uncertainty over the threat of state and national government intervention in the energy sector.
However, Mr Kean rubbished the move by AGL as a convenient excuse given several years of delays in sanctioning the Newcastle gas plant.
“AGL promised they’d build this gas peaker in 2018 and we haven’t seen a sod being turned. So this seems like a bit of a convenient excuse, if you ask me,” Mr Kean told a business conference on Monday.
He said the big producers could move aside if they were not prepared to invest.
“I’m here to look after the business and families of NSW. If the vested interests want to stand in the way, I say to them get out of the way. Let us get on with delivering cheaper, reliable energy,” Mr Kean said.
“The people complaining about this are the ones that don’t want this competition in the market — they don’t want lower prices because they want to continue to make super profits at the expense of the families of NSW, and I say that’s unacceptable.”
AGL chief executive Brett Redman said he was concerned the NSW government move was potentially doubling up on the private investment already accelerating in storage.
“The community is expressing a wish to move to that transition faster or differently — which is how I view what’s happening with the NSW announcements — and it’s important that we don’t muddy that up with what technology can already do for us and let the market make those big investments,” Mr Redman told the conference.
“Because the market is looking to do that in storage, just as over the last decade the market has been rapidly ramping up its investment in renewable energy.”
The state’s road map will ensure there is an “orderly transition” when coal plants are retired over the next two decades, according to Mr Kean, allowing NSW to avoid any hit to prices and supply in the process.
EnergyAustralia also expressed concern over political uncertainty and said it continued to assess the NSW government’s scheme to build more power generation, in addition to the Morrison government’s threat to build its own gas plant in the Hunter Valley.
The power giant had planned to make a decision on Tallawarra before the end of the year but said it had now deferred that until the first quarter of 2021.
“It’s also meant we have been able to reflect on the various announcements made by both federal and NSW governments and consider the role that this project needs to play in that market moving forward,” EnergyAustralia executive Liz Westcott told the conference.
“We are continuing to assess that project but we obviously can’t make a call on which way it will go.
“There’s been some many variables that we’ve had to contemplate — the role of Liddell itself, the role of Snowy, federal government and state government announcements. We see it as another thing we are now having to contemplate.” Federal Energy Minister Angus Taylor earlier took aim at Mr Kean, criticising the NSW government for a lack of consultation.
“AGL has said that the NSW announcement has impacted their investment plans,” Mr Taylor said. “… The commonwealth would like to see the modelling behind the policy. And I’m confident that we can work through it. NSW has indicated its strong intent to get to a sensible outcome.” AGL’s investment freeze may now imperil a separate ambition by the federal government, which had given companies until April to commit building 1000MW of new power capacity to ensure there was a like-for-like replacement for Liddell.
If private investors fail to step up, Canberra will build its own gas plant through Snowy Hydro which it owns.
That threat of intervention has also been slammed by the Australian Energy Council.
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