Frydenberg eyeing coal circuit-breaker

Coalition MPs have been told a plan to bring on extra base-load power through new coal or gas is being drafted.

Energy Minister Josh Frydenberg. Picture: Kym Smith

Coalition MPs have been told a plan to bring on extra base-load power through either new coal or gas is being drafted by Energy Minister Josh Frydenberg as an “add-on” energy policy to the ­national energy guarantee, in a move that will lock in future supply and head off a ­potential internal government ­rebellion.

A senior government source last night confirmed that Mr Frydenberg had assured colleagues that he would address concerns about the NEG and the lack of support for coal.

The move comes as Deputy Prime Minister Michael McCormack, acting on the authority of the Nationals partyroom, will lobby Malcolm Turnbull for ­additional measures to drive new investment in coal-fired power stations amid growing unrest over the government’s signature energy policy.

A set of specific proposals was to be raised by Mr McCormack with the Prime Minister before today’s joint partyroom meeting — the last before the Super Saturday by-elections on July 28 — ­according to the resolution of the Nationals partyroom.

The junior Coalition partner spent nearly 90 minutes discussing energy policy and agreed for the Nationals leader to meet with Mr Turnbull to commence ­discussions on how the entry of new coal-fired power stations could be accommodated alongside the proposed NEG.

The push came as former deputy prime minister John ­Anderson called for government intervention to help facilitate the construction of a new high-­efficiency, low-emissions (HELE) coal-fired power station. Mr ­Anderson, who was ­Nationals leader under John Howard from 1999 to 2005, defended the NEG being promoted by Mr Frydenberg as the “best thing on offer at the moment” but said it was time to be “utterly honest with ourselves for once in this country”.

“We really are about to hand a massive victory to the people who want to transform our economy in ways that I think will be very damaging,” Mr Anderson said.

“It won’t be just heavy industry that we’re going to lose. If you wanted a microcosm of why Australia is so badly stalled, look at the energy debate where emotion has consistently overruled reason and ad-hocery has overruled careful planning in the transition to ­renewable energy.

“The result is massive sovereign risk for people who might otherwise have invested in baseload power capacity.

“And while I am very much a free-enterprise man and fully recognise that it would not be normal Coalition policy or even good policy to build a HELE plant with taxpayers’ money, it may be time for a reasoned debate about finding a mechanism for underwriting a private operator in such a way that would offset what is effectively a smashed market which can no longer operate normally.”

The Nationals are not arguing for the NEG to be replaced but are seeking clarity on the future of coal-fired power in Australia, with some MPs including Keith Pitt and Andrew Gee last week questioning how the proposed policy would work and whether it would do enough to drive down prices.

It also comes as business and industry leaders address the ­Coalition’s backbench committee on energy policy this morning ahead of the joint partyroom meeting to talk up the NEG’s benefits. Speakers were to include BlueScope chief executive Mark Vasella, BHP chief commercial ­officer Arnoud Balhuizen, Minerals Council of Australia chairwoman ­Vanessa Guthrie, Business Council of Australia chief executive Jennifer Westacott, Australian Industry Group chief executive Innes Willox and National Farmers Federation president Fiona Simpson.

Resources Minister and Queensland Nationals senator Matt Canavan yesterday defended the NEG on Sky News, saying it would provide reliable supply and help Australia meet its Paris commitments to achieve emissions ­reductions of 26 per cent on 2005 levels by 2030.

However, he also said it was “really important, of course, that we keep coal as an option”.

Senator Canavan added that he was “quite confident” that coal- fired power stations would continue to be an option into the ­future, arguing they would be ­accommodated by the NEG.

“The latest and new coal-fired power stations are more efficient and they can help us lower our emissions,” he said.

Mr Abbott has held out the prospect of MPs crossing the floor to oppose the NEG unless it allows for the entry of new coal-fired power plants and has used a 2GB radio interview to accuse the Prime Minister of trying to stifle discussion of the topic in last week’s joint partyroom meeting.

Opposition energy spokesman Mark Butler said this morning’s meeting between the Coalition backbench and business leaders must “dispel the hard-right’s fantasy of building new coal-fired power stations”. He also expressed concern that the proposed NEG would lock in Mr Abbott’s “hopelessly weak climate targets for 12 years, placing huge costs on other sectors of the economy”.

Additional reporting:­ Ben Packham