Tony Abbott fuels push from backbench against clean energy target

Malcolm Turnbull is facing a backbench push to stop a clean energy target being embraced as government policy.

Tony Abbott warned against adding the clean energy target to the existing renewable energy target. Picture: AAP

Malcolm Turnbull is facing a backbench push to stop a clean energy target being embraced as government policy, after former prime minister Tony Abbott fired a warning shot on the political risk of adding the new scheme to existing subsidies for renewable power.

The Prime Minister yesterday played down the need for the target as he attacked Labor over energy prices and reliability, putting a priority on affordable power rather than cuts to carbon emissions.

A solid group has formed within the Coalition party room to oppose a clean energy target out of concern it would push up prices and weaken the security of supply because it would favour renewables over coal or gas generators. The substantial minority is opposed to a clean energy target of any kind and appears unlikely to be satisfied by a scheme that offers small financial incentives for gas-fired power or the most advanced coal-fired power stations.

Mr Turnbull and Energy Minister Josh Frydenberg have scaled back talk of a clean energy target while urging power company AGL to keep running its Liddell coal power station beyond its scheduled closure in 2022.

In a pointed intervention yesterday, Mr Abbott welcomed the talks with AGL on extending Liddell but warned against adding the clean energy target to the existing renewable energy target, which decrees that 23.5 per cent of electricity comes from renewables by 2020.

“If we graft a CET on top of the existing RET, that will be a difficult position to sustain,” Mr Abbott told the party room.

He later told The Australian that the nation had enough renewable energy in the system and should build new coal power stations because existing plans, such as the expansion of the Snowy Hydro scheme, would not be enough to make up for the closure of the Hazelwood coal power station in Victoria earlier this year.

“We are already slated under the RET to effectively double the amount of wind power in three years,” Mr Abbott said. “We would be better off saying no more subsidises for renewables.

“The Snowy Hydro 2.0 if it takes place will scarcely replace Hazelwood. Obviously we have to keep Liddell in the system.”

Mr Abbott said it was inevitable the government would have to fund new coal.

“The government will have to do it. The same way we are doing Snowy 2.0 we will have to do a new coal-fired power station,” Mr Abbott said.

One MP estimated a slim majority of the Coalition might reluctantly accept a clean energy target, the central recommendation in a report in June from Chief Scientist Alan Finkel, but a group of determined opponents would never vote for the idea.

AGL chief executive Andy Vesey has promised to respond to the government in 90 days with a decision on whether the company can extend the life of Liddell, sell it to another operator or build alternative energy generation to avoid a shortfall in 2022.

At this stage, the company’s preferred plan is to shut down the coal-fired power station and build a combination of renewables with gas-fired generators alongside to meet periods of peak demand.

Mr Vesey has backed the idea of a clean energy target but some MPs expect AGL to develop a plan for Liddell without knowing whether the government will embrace the new scheme or not, leaving a cloud over the market. The government’s position is that it needs to know the outlook for baseload power before deciding on the clean energy target.

Bill Shorten seized on this uncertainty in parliament yesterday to challenge Mr Turnbull on the policy.

“How can the government expect industry to decide on new generators if the government can’t even decide on a clean energy target?” the Opposition Leader asked.

Mr Turnbull said the target was “under consideration” but he emphasised the need to have reliable power rather then talking up renewables.

“We need to ensure that the energy market design provides a suitable framework for investment that doesn’t simply get new generation, it gets generation of the right kind,” he said. “Because you have to keep the lights on and you have to ensure that people can afford to pay to keep the lights on, and that is where Labor has failed.”

Mr Frydenberg and Labor MP Joel Fitzgibbon yesterday clashed in a corridor over the government’s negotiations with AGL. Mr Fitzgibbon opened the exchange, accusing Mr Frydenberg of misrepresenting the outcome of talks with AGL about keeping the Liddell coal station open after 2022. Mr Frydenberg said Mr Fitzgibbon, the member for Hunter where Liddell is located, was defending the “big energy companies who are making big profits off the back of Australian families”.