Higher power prices are something beyond debate

Election debates are generally stage-managed affairs that offer little by way of policy substance, but on energy things are different. Anything that can give voters an insight into what distinguishes the two major parties on the vital issue is of utmost importance. And on this score the difference on offer is great. As Energy Minister Chris Bowen explained in his debate with opposition spokesman Ted O’Brien on Thursday, the Albanese government remains absolutely wedded to a renewables-only transition backed up by gas and batteries. The fruits of Labor’s approach already are on display. They include higher prices, community dislocation and potential power shortages. But Mr Bowen has a steadfast view that this plan still represents the cheapest way to deliver on a promise to cut carbon dioxide emissions.

At the heart of the whole process is our commitment to the Paris Agreement, a global compact to achieve ambitious but not legally binding climate goals. The opposition shares Labor’s commitment to net zero by 2050 – which is the real Paris benchmark – but has left room to manoeuvre on the targets that are set along the way. If this were a rerun of the 2022 election, that would be a much bigger deal than it is today. It will still quicken the pulse of the usual protest suspects but the reality of global climate change action is that while governments have been compelled to set targets, there has been a near universal failure to meet them.

With the mechanics of the low-emissions transition proving more difficult and costly than expected, the gulf between expectation and result is only likely to get bigger. This is particularly so given Donald Trump has again pulled the US out of the Paris Agreement and doubled down on fossil fuel production, while China, India, Indonesia and some of the world’s other most populous nations continue to build coal-fired power stations apace. This is the context in which Mr O’Brien’s comments on our energy future must be viewed. He has said that if elected, the Coalition’s approach would be based on the “art of the possible”. This will take stock of the trajectory of emissions, the state of the economy, and the suite of policies at the Coalition’s disposal. Mr O’Brien makes the obvious point that while decarbonisation is good, deindustrialisation is bad. In many ways the Coalition plan mirrors the approach taken by the Crisafulli LNP government in Queensland, which has taken stock of where a decade of Labor has left the energy sector in that state. The big revelation has been the lack of discipline in costing and organisation for signature projects announced with great fanfare by Labor that have now been scrapped.

Federally, the energy transition is also crying out for a rigorous dose of cost-benefit accounting. Mr Bowen is hamstrung by Labor’s failure to meet its last election promise to cut electricity bills by $275. Junking the RepuTex modelling on which it was based leaves Labor with a weak hand to argue its case going forward. In the debate, Mr Bowen was unable to verbalise what the total system cost of Labor’s plans would be. But he has been happy to bandy about a $600bn figure for the Coalition’s nuclear ambitions, which Mr O’Brien successfully prosecuted was five times higher than the CSIRO’s estimate and could be sourced to the most extreme forecast of the Smart Energy Council, which describes itself as “a vital voice for renewables”.

Mr Bowen is correct to argue the election represents a fork in the road when it comes to energy. Labor is offering more of the same on renewables, peaking gas and batteries. The Coalition supports renewable energy but wants to reinvest in coal as part of a transition to more gas and then nuclear.

Victoria is a good example of what happens when energy policy is captured by ideology. State Labor is now pleading for more gas despite demonising the fuel and refusing to allow proper exploration in that state. This is why the Coalition’s plan for a stocktake and real-world appraisal that puts the economy and household budgets first makes a lot of sense.