Labor to blame for electricity woes, Turnbull declares

Labor governments were responsible for electricity price hikes and blackouts, the prime minister declared yesterday.

Malcolm Turnbull speaks to the Queensland Media Club yesterday. Picture: AAP

Malcolm Turnbull has attacked state and federal Labor governments for creating renewable energy schemes with little regard for maintaining baseload power, declaring the policies were responsible for price hikes and blackouts.

The Prime Minister yesterday said the electricity market was in crisis because of a failure to “integrate energy and climate policy” as he took aim at the federal Renewable Energy Target and the state-based targets in South Australia, Victoria and Queensland.

“The structure of the Renewable Energy Target imposed a subsidy separate to the price signals of the energy market. Prices went up but new investments in reliability did not,” Mr Turnbull told the Queensland Media Club.

“Labor ignored reliability and the importance of dispatchable power. And so, price volatility drove outcomes. The system was compromised as investment signals were distorted.”

The national RET was legislated by the Rudd government in 2009 and requires 20 per cent of Australia’s electricity be produced from renewable energy by 2020.

Labor governments in Victoria, South Australia and Queensland legislated their own more ambitious RET targets, which have been blamed for widespread blackouts in South Australia and the early closure of the Hazelwood coal-fired power plant in Victoria’s Latrobe Valley.

“Reliability suffered, most noticeably in South Australia, where their reckless reliance on renewables without storage or firming ­capacity left their system vulnerable,” Mr Turnbull said.

“What were they thinking? What was that Labor government thinking? Had it not occurred to them that the sun doesn’t shine all the time and the wind doesn’t blow all the time? Apparently no thought at all, except a long extension cord to the Latrobe Valley.” The Australian Competition & Consumer Commission recommended in its report released yesterday that state governments should bear the cost for their renewable energy schemes through their budgets, rather than the costs being passed onto household bills.

The report also called for a tightening of the eligibility of renewable energy schemes and for the Small-scale Renewable Energy Scheme to be wound down by 2021.

Mr Turnbull said the government’s national energy guarantee would be “technology neutral” and it would be a mistake to subsidise either renewables or coal.

“The (NEG) will ensure investment in whatever technology the energy market needs — solar, wind, coal, gas, batteries, pumped hydro and others. It’s not pro-coal or anti-coal, pro-renewables or anti-renewables,” Mr Turnbull said.

“Renewables do not need to be subsidised any longer. The latest long-term contracts are coming in at less than $65 a megawatt hour. It’s below the average market price today.

“Coal is forecast to remain 60 per cent of our generation mix in 2030. Portraying the future as an either-or is simply wrong.”

He savaged Bill Shorten’s target of 50 per cent renewables by 2030.

“Labor’s 50 per cent Renewable Energy Target repeats the mistakes of the past by making technology, rather than price, the focus of policy,” Mr Turnbull said.

“Continuing to force-feed renewables into the market through subsidies guarantees higher prices and less reliable energy.

“So the choice is going to be very clear, at the by-elections and indeed, at the general election next year, lower prices under our technology neutral customer ­focused National Energy Guarantee, or higher prices under Labor’s reckless renewable energy subsidies.

“Cheap energy goes to the heart of our economic competitiveness. And that’s where the simplistic economics of Labor’s harsh carbon taxes or trading schemes are laid bare. You cannot adjust to the future if you cannot compete now.”