Tony Abbott calls for Australia to pull out of Paris climate deal

The Nationals want at least three baseload power stations to support the PM’s national energy guarantee as Tony Abbott urges withdrawing from Paris deal.

Tony Abbott: ‘Withdrawing from the Paris Agreement that is driving the ­national energy guarantee would be the best way to keep prices down and employment up’.

The Nationals are demanding the construction of “a minimum of three” baseload power stations as the price of their support for Malcolm Turnbull’s national energy guarantee, as Tony Abbott last night called on the government to abandon the Paris climate agreement.

Delivering a lecture to the Australian Environment Foundation — a climate sceptic think tank — in Melbourne last night, the former prime minister argued that abandoning the Paris targets would help “save” the Liberal Party and protect its legacy over the next 10 years.

He defended his criticism of the energy guarantee as well as his push to build new coal-fired power stations by advocating for a profound overhaul of climate policy that would see Australia follow the lead set by Donald Trump.

“Withdrawing from the Paris Agreement that is driving the ­national energy guarantee would be the best way to keep prices down and employment up, and to save our party from a political ­legacy that could haunt us for the next decade at least,” Mr Abbott said.

The comments add to pressure over the national energy guarantee as the Nationals push their own separate agenda.

A two-page list of demands aimed at combating the threat of sovereign risk for potential investors in new baseload power generators, including coal-fired stations, is being promoted by the Nationals as a “genuine and serious policy position” to supplement the Prime Minister’s signature energy policy.

The confidential working document — obtained by The Australian — sets out the position of the minor Coalition party and advocates for the creation of a $5 billion fund to “ensure (a) reliable energy mix is delivered to Australian electricity users in the short, medium and long term”.

Only coal, gas or traditional hydro projects capable of delivering electricity “24 hours a day, seven days a week, regardless of weather conditions” would be ­eligible for assistance under the proposal.

Operating under a ­“government-owned company model”, the suggested fund would keep any new power stations off budget, like the approach taken with the western Sydney airport and ­inland rail projects.

Recasting the already divisive energy debate as a struggle for the soul of the Liberal Party, Mr ­Abbott said that it took “character to do what’s right” as well as “courage to disagree with your peers”.

“Far from ‘wrecking the government’, MPs worried about ­energy policy are trying to save it with a policy that would be different from Labor’s,” he said.

Mr Abbott also canvassed ­unwinding Australia’s emissions targets or abandoning them to “whatever would actually be achieved in 2030 through normal business cost-cutting and efficiencies, plus whatever is delivered through the emissions reduction fund”.

The Nationals are keen to ­ensure their push to supplement the energy guarantee is not linked to Mr Abbott’s alternative conservative agenda or the leadership as they seek to maximise their chances of Mr Turnbull and Energy Minister Josh Frydenberg agreeing to their key demands.

The Australian can reveal that the $5bn fund proposed by the ­Nationals would be broken into two key components: a “grant fund” as well as an “equity fund”. It would sit within the infrastructure portfolio held by Nationals leader Michael McCormack.

The grant fund would be used to “extend the life of existing plants or increase capacity, ­including emission reduction improvements … and rapid capacity improvements such as installing new units at existing stations”.

However, grants would not be awarded for standard or planned maintenance to existing stations.

The equity fund is aimed at the delivery of at least three new baseload power stations with a minimum capacity of 1200 megawatts according to a set of strict criteria, including a cost-benefit analysis against other projects to be conducted by the Infrastructure and Project Financing Agency.

Both funds would work in consultation with the Energy Security Board, which would provide guidance on how assistance from the two funds should be allocated.

Factors that would need to be considered for the finance of projects would include emissions ­reduction, “completion time and delivery to market” as well as the “availability of transmission ­capacity or the potential to deliver capacity in the short term”.

Projects would also need to be located in an “area of forecast need”.

Queensland LNP MP George Christensen told The Australian he would not support the national ­energy guarantee unless it included measures to drive more investment into baseload power generators.

“I can’t support anything that doesn’t have an incentive built into it for baseload power,” Mr Christensen said.

“Whether that’s grants, whether it’s direct investment or government equity in projects — all of the above should be ­considered”.

Queensland LNP senator Barry O’Sullivan said he would not comment on “any resolutions of the partyroom” but said he was a very strong advocate for new clean coal-fired power generators.

“They provide security of supply. They will put downward pressure on the cost of energy in the marketplace and the modern technologies that are used in the development of these power stations will also make a great contribution to the reduction in carbon emissions,” Senator O’Sullivan said.

Mr Frydenberg said almost 4.3 million households in Queensland, NSW and South Australia had benefited from lower retail electricity prices following the Turnbull government’s intervention in the gas market last year. “Further power price relief is on the way,” Mr Frydenberg said. “The ­national energy guarantee, in conjunction with existing policies, has been forecast to reduce household electricity bills by $400, according to the independent Energy Security Board.”

The Turnbull government yesterday took full ownership of Snowy Hydro Limited at a cost of more than $6bn, which NSW and Victoria will spend on infrastructure projects.

Mr Abbott yesterday linked his push to abandon the Paris Agreement to dissatisfaction with the ­national energy guarantee, arguing the policy would be greatly ­improved if it contained a “price target as well as an emissions-­reduction target”.

The speech will embolden other Coalition MPs to speak out against the Paris targets, which commit Australia to reducing emissions by 26-28 per cent on 2005 levels by 2030.