Josh Frydenberg coal tour to appease Nationals

Josh Frydenberg will meet with pro-coal Nationals MPs as he comes under pressure to underwrite three new baseload power plants.

Energy Minister Josh Frydenberg. Picture: AAP

Energy Minister Josh Frydenberg will meet pro-coal Nationals MPs and visit a coal-fired power station in a tour of marginal Queensland seats as he comes under pressure from the minor Coalition partner to underwrite three new baseload power plants.

Mr Frydenberg will meet ­Nationals MPs Michelle Landry and Ken O’Dowd — two of the most marginal seat holders in the nation — who yesterday questioned the value of Australia ­remaining in the Paris climate treaty and lobbied for a new coal-fired power plant.

The timing of Mr Frydenberg’s trip, in the coming weeks, raises the prospect of the government offering a concession to the ­Nationals, who have raised concerns over the government’s ­national energy guarantee, before the crucial Longman by-election in Queensland on July 28.

As revealed by The Australian yesterday, the Nationals are ­pushing for the creation of a $5 billion fund to allow the government to take out equity in at least three new baseload power stations as the price of their support for the ­NEG.

Operating under a “government-owned company model”, the fund — which is available only to new coal, gas and traditional hydro proposals — would keep any new power stations off ­the budget books by treating them as an investment, replicating the approach taken with the western Sydney airport and inland rail projects.

Deputy Prime Minister ­Michael McCormack has initiated discussions with Malcolm Turnbull about the list of ­demands drawn up by the Nationals, but emphasised the energy guarantee was “supported by the Liberal and Nationals government”. “We continue to have normal policy discussions on an energy plan which can deliver reliable ­energy supply while lowering costs and reducing emissions to meet set targets,” Mr McCormack told The Australian. “Energy costs need to be addressed for households and businesses; ­especially in regional areas.”

However, the Nationals Leader also expressed frustration with colleagues after the two-page document containing the Nationals’ list of demands — and agreed to by the partyroom last week — was leaked to The Australian.

“I’m disappointed that a document that was drawn up in the ­Nationals partyroom and should stay in the partyroom has been leaked and is being reported in the media,” he said. “It’s not helpful, when you’re trying to bring about a resolution on an important policy which has benefits for all Australians by lowering power prices, that some are playing politics.”

The Liberal National Party state convention in Queensland this weekend is preparing to ­debate motions calling on the Turnbull government to support new coal power stations while also maintaining a “commitment to the free market”.

Another motion, from Nat­ional MP George Christensen’s ­seat of Dawson, urges the state LNP opposition to reaffirm its election pledge to see a north Queensland coal-fired power plant constructed. It follows new LNP leader Deb Frecklington distancing herself from the policy, instead announcing she would direct investment in state-owned renewables.

Ms Landry — who holds the seat of Capricornia on a margin of 0.7 per cent — yesterday appeared reluctant to support the energy guarantee unless it contained ­incentives for coal-fired power.

“I think we need negotiation on it,” she said. “I would like to see at least one (coal-fired station), and I would like to see it in Queensland … And part of the discussion was that perhaps we could have a fund that would extend the life of those power stations.”

Ms Landry said Mr Frydenberg would make his visit “in a couple of weeks” and she would “take him through a coal-fired power station and take him out to a coalmine”. Mr O’Dowd — who holds the seat of Flynn on a margin of 1.1 per cent — said he wanted to “stop the demonisation of coal” because it supported “thousands of jobs in my region”.

“It’s the only thing I can see that will bring power prices down and be an affordable and reliable ­energy source,” he said.

Mr O’Dowd also sounded a warning, saying he did not think he would support the NEG unless it could “give me an answer on how it is going to bring prices down and to what level”.

“We just cannot see the NEG bringing prices down unless there’s coal or gas or new power stations involved,” he said.

Bill Shorten called the Nationals’ demands “more unicorn rubbish” and accused them of “spinning fairytales”. The Opposition Leader signalled Labor could oppose the NEG if it was amended to allow government subsidies for new coal-fired power stations.