New energy agenda: Power price cuts put before Paris emissions

Energy Minister Angus Taylor has set out the new agenda that will ­relegate carbon emissions, prioritising price cuts.

New Energy Minister Angus Taylor. Picture: Gary Ramage

Energy Minister Angus Taylor has set out the Morrison government’s new energy agenda that will ­relegate Australia’s Paris carbon emissions cuts to a third-order issue and prioritise slashing power prices and ensuring system reliability.

In his first interview since being appointed by Scott Morrison as “the minister for lowering power prices”, Mr Taylor repudiated the idea, pursued by Malcolm Turnbull, that delivering certainty for energy investors required a commitment that the sector’s emissions would fall within Australia’s Paris Agreement target.

Mr Taylor spoke to The Australian yesterday ahead of a speech today in which he will set out the government’s plan to deal with the energy crisis based on “the very clear blueprint” from the competition watchdog.

The plan, to be outlined at a small-business summit in Sydney, includes a price safety net for consumers, a focus on competition and reliability, and measures to end “price gouging” by power companies.

Mr Taylor, who was sworn in as minister on Tuesday, said meeting the government’s climate-change commitments was not part of his brief from the Prime Minister.

“I’m focused on getting prices down while I keep the lights on. I’ve got one KPI. I’ve got one goal,” he told The Australian.

The economist and former McKinsey & Co analyst said he did not favour any power-generation technology over another and was neither a “climate sceptic” nor “anti-renewables”, as claimed by Labor.

“At the end of the day, we just want to get prices down. We’re not going to get ideological about it; we just want to get the outcome. It’s very pragmatic,” he said.

Before the collapse of his nat­ional energy guarantee, Mr Turnbull and former energy minister Josh Frydenberg had argued, with industry backing, that integrating Australia’s carbon emissions commitments into the NEG was vital to deliver certainty to industry.

But Mr Taylor, who has been spoken of as a future Liberal leader, said dealing with uncertainty was “the nature of business”.

“Frankly, I think there is some naivety in the idea that governments can largely eliminate uncertainty, or should even try,” he said.

“Parliaments or governments can’t bind future parliaments and governments — this would be a breach of the fundamental principle of parliamentary ­sovereignty.

“What you need is enough confidence to invest. That’s the threshold. So that’s what we are ­focused on. The ACCC has laid out a whole series of recommen­dations to help with that.”

He said the government was working through those, some of which were already announced.

The key points of the new ­Morrison-Taylor plan were flagged by Mr Turnbull last week after the collapse of the NEG amid a partyroom revolt.

The price safety net is based on the Australian Competition & Consumer Commission’s proposed default market price to replace unregulated standing offers. This was expected to save households $183 to $416 a year and typical small businesses $561 to $1457.

To boost competition and supply, the government would push on with its plan to underwrite low- cost, “stable”-generation capacity for commercial and industrial users. It would also implement the ACCC’s recommendation to cap the share of generation capacity in each market, limiting the growth of big players.

Mr Taylor said the government would tackle price gouging by network businesses and energy wholesalers. Network businesses would lose the power to appeal regulators’ rulings based on “limited merits”, while forced divestment would be a “big stick” to guard against anti-competitive behaviour by energy wholesalers.

“The power to divest is obviously a last resort,” Mr Taylor will say in his speech today. “The better answer is that industry works with us to get wholesale prices down.”

Mr Taylor, a conservative Liberal MP from country NSW, had been an internal critic of the NEG and resigned from the Turnbull ministry in protest against the shift of the party to the Left under the former prime minister.

In today’s speech, he will say he is not a climate sceptic but is sceptical of complex, economist-­designed schemes to address climate change.

He will tell the Council of Small Business Organisations of Australia that the government’s job is to build community trust that it can deliver lower power prices.

He will attack Labor’s plan for a 45 per cent cut to carbon emissions as one that would force the closure of coal-power plants with no plan for energy security.

“Their focus is on batting away Greens party threats to its inner- urban MPs, not on developing ­evidence-based policy that will lower bills,” he will say.