Ginger group calls on government to invest in ‘Hazelwood 2.0’ coal-fired power plant
A letter inviting Coalition MPs to join the Monash Forum calls for the government to invest in a $4billion coal-fired power plant.
The Monash Forum believes the government should build a $4billion power Hazelwood 2.0 power station in Victoria’s Latrobe Valley while exploring further sites for coal-fired plants.
The manifesto of the Coalition ginger group, obtained by The Australian, calls on signatories to advocate for the affordable and reliable power “that our parents and grandparents had”.
The Australian understands it was drafted by Mr Andrews and 20 MPs have signed it, while others had indicated their support verbally.
“If the government can intervene to build Snowy 2.0, why not intervene to build Hazelwood 2.0 on the site of the coal-fired power station in Victoria that is now being dismantled? All the transmission infrastructure already exists; all the environmental permits have already been obtained; and a new, low emissions coal-fired power station can certainly be built for no more than $4bn,” the manifesto said.
The two-page document said there were other good sites for new or refurbished coal plants and argued government intervention was needed to keep the Liddell Power Station open in the NSW Hunter Valley.
“There is a strong case for keeping NSW’s Liddell power station open beyond its current closure date of 2022, as the Turnbull government has recognised. But nothing is going to happen without government intervention, as AGL’s rebuff to the government over Liddell clearly indicates,” it said.
The document says the group is not opposed to renewable energy, as long as there are no grants or mandatory targets.
“We accept that, in time, couples with more efficient and larger scale batteries, renewable power is likely to form a bigger proportion of Australia’s power generation,” it said.
“But that time has not yet come, and we’re sceptical of any claims made for the viability of renewables that requires continued mandatory use or taxpayer grants.”
The document labels Sir John Monash as Australia’s “greatest war general” and lauded him for turning Victoria’s Latrobe Valley into an “electrical powerhouse”.
“We, the undersigned, agree to be foundation members of the Monash Forum and we invite our Liberal and National parliamentary colleagues to join us: in seeking to give today’s Australians the affordable and reliable power that our parents and grandparents had, largely thanks to Sir John Monash,” it said.
The Minerals Council said it supported the technology neutral approach being taken by the Turnbull government, but welcomed discussion about how Australia could restore its historically competitive advantage of having reliable, low-cost energy, while meeting its emissions reduction targets.
“The MCA has highlighted that generators which provided 66 per cent of low-cost baseload power in 2016 will retire between now and 2030, and any future policy approach must aim to provide lowest-cost, dispatchable energy available 24/7,” a spokesman said.
“The MCA believes a technology-neutral approach should be adopted for all low emissions energy sources (including advanced coal technology, renewables, gas and nuclear) where no one technology is favoured to the exclusion of others – whether through subsidies, direct government funding or other means.”
Turnbull ‘has party room backing’
Malcolm Turnbull says he isn’t fazed by a new ginger group within the coalition agitating for coal-fired power, saying he has party room support for his national energy guarantee.
The new Monash Forum group has more than 20 government members including former prime minister Tony Abbott, Liberal MP Craig Kelly, Nationals MPs George Christensen and Barnaby Joyce who are worried about the high cost of electricity and want to see new coal-fired power stations. The new forum is named after World War I military commander (Sir) John Monash, who was a key figure in opening Victoria’s Latrobe Valley up to coal production.
Mr Turnbull told reporters in Brisbane this morning his policy put a premium on “dispatchability”, which could be delivered by coal, gas, pumped hydro or other technologies.
“There are those who are concerned that there should be more investment in coal-fired power stations,” he said.
“The national energy guarantee puts a premium on dispatchability, 24/7 power.
“Now coal can obviously provide that, so can gas, so can hydro, so can other technologies. What we want to ensure is Australians have affordable and reliable power.
“The national energy guarantee is a real breakthrough. It is a market based policy designed by the Energy Security Board, and what that will ensure is that we have affordable, reliable power and of course we meet our emissions reduction commitments.”
Asked whether the formation of the Monash Forum was a slight to his leadership, Mr Turnbull said the NEG had been endorsed by the whole Coalition party room.
“I can only say to you that our national energy guarantee has been endorsed by the whole coalition party room,” he said.
“It’s got strong support from industry, it’s got strong support from state jurisdictions. It now has the support of the South Australian government following the change in government,” Mr Turnbull said.
“It’s vitally important that it is adopted because what we need is a technology-agnostic energy policy that encourages investment, and that’s precisely what the national energy guarantee will do.”
Mr Turnbull said the bottom line was to have a policy which delivered affordable and reliable power and met Australia’s emissions targets.
.@TurnbullMalcolm responds to questions on the pro-coal 'Monash Forum' and instability within the government.
— Sky News Australia (@SkyNewsAust) April 3, 2018
MORE: https://t.co/XBqsrUMXs2 #SkyLiveNow #auspol pic.twitter.com/9lPcF4lM3j
Energy Minister Josh Frydenberg also downplayed news of the pro-coal ginger group, saying he is “technology neutral” and sees coal as part of Australia’s energy mix for as long as it continues to provide cheap, reliable, dispatchable power.
Mr Frydenberg said a state, territory and federal energy ministers’ meeting laster this month to decide on the next steps for his national energy guarantee was “an opportunity that can’t be missed” to ensure the right investment signals were in place to deliver affordable, reliable power.
“The Turnbull government’s approach is technology neutral. We have an approach that sees no new subsidies, taxes, trading schemes, but an important place for coal, for gas, and for renewables,” Mr Frydenberg said.
“I am not pro-coal or anti-coal, I am not pro or anti-renewables, but I am in favour of lower energy prices and a more reliable industry.
“That’s why we’ve taken action to intervene in our gas market, with our networks, with the retail offerings, and the national energy guarantee which will see the average Australian household $300 a year better off than they would be under Labor.
“The Coalition is driving a more affordable and reliable energy system, and under the Labor Party you will always pay more.”
Mr Frydenberg said he and the members of the Monash Forum wanted the same thing, namely lower power prices and a more reliable system.
“Coal has an important part to play in that role, as it has in the past and as it will in the future,” he said.
“I heard Craig Kelly on the radio this morning strongly support the structure of the national energy guarantee, and as you know energy ministers will be gathering in two weeks’ time to decide on next steps.
“The national energy guarantee will be for the first time properly integrating energy and climate policy, and independent modelling shows that energy bills will fall under the national energy guarantee.
“What we’ve been missing is those right investment signals to generate the new supply into the market that we need, particularly as some of our ageing power plants close.”
Mr Frydenberg said he was not aware of all of the members of the Monash Forum.
“I do point out that Sir John Monash himself valued new technology and he saw it as an opportunity, whether it was on the battlefield or in the energy system, and he would look at the transformation that is currently underway in our energy system and use it as an opportunity to drive more innovation and to drive lower power prices,” he said.
“I have seen the letter, and I don’t know all the names. I did speak to my colleague Craig Kelly this morning. He’s obviously one person that’s on the list, and his issues are the same that they’ve been for some time.”
Mr Frydenberg said the recent purchase of the Loy Yang B power station in Victoria’s Latrobe Valley by energy company Alinta showed there was still interest in investing in coal.
“I work closely with my colleagues, including the members of the so-called Monash Group to deliver a more affordable, reliable system,” he said.
“I value my colleagues, I value their views, and I will continue as I’ve done in the past and as the Prime Minister has done, to work closely with them.
“I think the issues that are being raised about the importance of coal in the system have been around for a very long time.”
‘We need to be clear what this ginger group is doing’: Labor
Labor energy spokesman Mark Butler called for the Turnbull government to rule out providing government subsidies to coal-fired power plants.
Mr Butler claimed the only business figure who had been interested in building a coal-fired power station was former senator Clive Palmer.
“The market has made its position clear, but we need to be clear what this new ginger group is doing,” Mr Butler said.
“It recognises, I think, that that no private investor, no private lender is going to build a new coal-fired power station.
“It wants taxpayers to foot the bill for this technology, and that is something that Malcolm Turnbull and Josh Frydenberg, for that matter, should rule out definitively.”
Mr Butler dismissed a push from Chinese conglomerate Shandong Ruyi to buy AGL’s Liddell coal-fired power station in NSW, saying it would be about 50 years old by 2022.
“AGL, the current owner, and all of the electricity industry insiders who have commented on the current condition of the Liddell power station would seem to indicate that this is not a particularly sound purchase,” Mr Butler said.
Mr Butler said federal Labor supported the government’s ambition of achieving bipartisan energy policy, but did not believe the NEG could deliver, citing concerns about entrenching the market power of the “big three” generators and “strangling renewable energy investment”.
“We know it is important to settle a bipartisan energy policy to start to bring to an end this energy crisis, but there are still very significant design flaws in the national energy guarantee, and frankly reports this morning of this very substantial ginger group led by Tony Abbott and Barnaby Joyce indicates that there are probably very significant rocky roads ahead for the Coalition party room,” Mr Butler said.
‘The band’s back together’
Liberal backbencher Craig Kelly has denied that the formation of the group represents a challenge to Mr Turnbull’s leadership.
The Australian was told last night that Barnaby Joyce had thrown his support behind the new informal political faction along with up to 11 other Nationals. The former deputy prime minister did not respond to requests for comment.
The lobby group could threaten the Prime Minister’s national energy guarantee (NEG) as he attempts to secure support from state and territory governments for a new national framework later this month.
Mr Kelly this morning denied the group were flexing their political muscles ahead of Mr Turnbull’s likely 30th consecutive Newspoll loss, which is due next Monday.
Mr Turnbull challenged Mr Abbott for the prime ministership in 2015, using the impending loss of 30 consecutive Newspolls as justification.
“That’s a bit of a long bow. I was never an advocate of counting the 30 Newspolls or the number of Newspolls,” Mr Kelly told ABC radio.
“The reality is that in today’s economy when you’re trying to wind back a budget that is in deficit and you’re trying to get it back to a balance and surplus, during the term of government you are not going to be popular and you’re going to be down in the polls.
“That is the reality of life no matter who is Prime Minister. We will continue and Prime Minister Malcolm Turnbull has my full support.
“He is doing a very good job under very difficult circumstances and we will see those polls tighten right up as we get closer and closer to the election.”
Asked whether Mr Turnbull would still have his full support if coal was not given a more prominent role in the NEG, Mr Kelly said he would.
“He will. The Prime Minister, and at the end of the day we are a team, we are a Liberal and Coalition team,” Mr Kelly said.
“When we go to an election we will be on the right team because most of us, or all of us understand, when we look across the aisles and we see the potential damage that a Bill Shorten government would do to this nation, and that will unite us above anything else.”
PM put on notice: Labor
Labor frontbencher Brendan O’Connor said the Monash Forum wasn’t about government subsidies for coal-fired power, but about “putting the Prime Minister on notice”.
“What’s worse than having a former prime minister on the backbench? Having a former prime minister and a former deputy prime minister on the backbench, and this group of course is being led now by Tony Abbott and Barnaby Joyce,” Mr O’Connor told Sky News.
“That’s the band that’s been put back together, and the Prime Minister Malcolm Turnbull should be very concerned because of the instability and the efforts by this group to clearly indicate that they’re willing to go after him and make life very difficult.”
One Coalition MP told Sky News the Monash Forum was “a Triple A special from Abbott, Abetz and Andrews”, while a member of the forum downplayed it, saying: “the only new element to this is the fact that it’s got a new name.”
Mr Kelly, who is chair of the parliamentary backbench committee on energy and the environment said he backed government intervention to build coal-fired power stations because the long-term investment was difficult for the private sector.
“The problem that you have, is to build a coal-fired power station requires an investment of 30 to 40 years, and because of the potential of technological change and also because of the sovereign risk of changes in government over that period, which may change the rules over 30 to 40 years, it becomes difficult for the private sector to invest in that,” Mr Kelly said.
“Now almost every other coal-fired power station with a few rare exceptions over the last 30 years, 40 years, have been built and financed by governments.
“Around the world there’s something like 650,000 megawatts of coal-fired power currently under construction.
“Japan is building 40 of these high efficiency, low emissions power stations. There’s hundreds of them being built in China. Many other countries throughout Southeast Asia.
“In Australia we need to get at least one or two of these built to ensure there’s enough baseload power in the grid.”
Mr Kelly said the group was not against the NEG, and their long term support ultimately depended on the extent to which the policy preferences low cost energy, and especially coal, as part of Australia’s energy mix.
“The group’s actually hoping to support the Prime Minister and support the NEG,” he said.
“The national energy guarantee that the Minister’s put together is a very good backbone of a policy, however, the parameters that are set are very important to ensure that it actually is technology-neutral.
“We have the structure of the National Energy Guarantee, which as I said is a good structure. The Minister has done very good work and I’m behind the Minister, behind the Prime Minister 100 per cent with this, but where we get those parameters which are being set through the Energy Security Board, that is still to be determined.
“It’s difficult to say exactly what the baseline should be. The bottom line is we have to make sure we are getting low cost energy through.”
Deputy Nationals leader Bridget McKenzie noted Mr Kelly’s support for the structure of the NEG.
“I think as somebody that represents the regions, we don’t hide from the fact that coal needs to be part of our ongoing energy mix,” Senator McKenzie told ABC radio.
“It’s an incredibly reliable form of energy production and going forward, like hydro, like gas, under the national energy guarantee, coal has a real opportunity to continue to be part of the strong energy mix.
“At the end of the day I don’t want to be ideological about how we ensure that Australians have access to affordable and reliable power.
“What the Australian government needs to do and what we are doing, is ensuring that those who need to and want to invest in the production of energy have a clear signal that it’s safe to do so and that coal will be part of that energy mix, like hydro, like renewables, like the whole suite.
“We’re not going to get ideological about this. We’re going to let science inform our policy and I think that’s a real change for us and I think it’s exciting.”
Sukkar: Not much in Monash
Liberal frontbencher Michael Sukkar downplayed the formation of the Monash Forum.
“To be honest there are a whole host of formal and informal groups that members coalesce around and speak about policy,” Mr Sukkar told Sky News.
“The idea that this is somehow new or interesting or exciting surprises me to be perfectly honest.
“Energy is something that our party room is very focused on, in particular ensuring that we get prices down, that we can ensure the stability of our system.
“These were the things that were at the foremost of our partyroom’s mind when it completely endorsed the national energy guarantee and the path that Minister Frydenberg has taken us down in what I think is a really admirable way, so to be honest I don’t think there’s much in it.”
Asked how many MPs had joined the Monash Forum, Mr Sukkar said: “you’d have to ask the journalist who wrote it”.
“The reality is we’ve got I think a very, very united party room around the idea that we’ve got to get energy costs down and that we’ve got to ensure stability in our system.
“The choice at the next election will be very clear. We will have a plan that will mean the average household will have energy costs of $300 per year less than the Labor Party.
“That’s what I think everyone’s focused on, and the idea that backbenchers may or may not be speaking to each other about these things is news, again kind of surprises me.”
Mr Sukkar said the national energy guarantee prioritised dispatchability and reliability, regardless of energy source.
“We saw the experience of the Labor Party in South Australia where you just piled more and more unreliable energy generation into the market. What happens ultimately? You have the highest electricity costs in the world and the least reliable systems prone to blackout,” he said.
“The national energy guarantee will ensure those things don’t happen, and in that sense I think it’s a very powerful argument to counter what we’re doing compared to the Labor Party, which is higher electricity costs and really taking South Australia, the experience that we all saw in South Australia, national, which we don’t want.”
Mr Sukkar said coal would continue to comprise more than 50 per cent of Australia’s energy generation “well into the future”.
He dismissed the notion that the Monash Forum was being pushed by people trying to undermine Malcolm Turnbull’s leadership.
“I doubt it. I honestly do doubt it. I suspect, as I said there are innumerable numbers of formal and informal groups of MPs in parliament who meet, some that might have titles and some that don’t,” Mr Sukkar said.
“I suspect this is a pretty excitable sort of article that’s been written, but anyone that knows how parliament works, anyone who knows how the Liberal Party works knows that we as a party, as individual members never stop talking about policy, we never stop talking about it, and the idea that a group of backbenchers who might be speaking about policy is some sort of nefarious gathering I find very surprising.”
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