Reliable and affordable power must be the priority

Less than a month from the “Super Saturday” by-elections and with the opposition in disarray over tax, the last thing Malcolm Turnbull needs is agitation within the Coalition, whipped up by Tony Abbott. That said, and more important for the nation, the last thing the economy needs is for soaring power prices and unreliable supply to undermine productivity, confidence and investment. The Prime Minister will be peeved over Mr Abbott’s feisty address to climate-sceptic think tank the Australian Environment Foundation, in which the former prime minister called for Australia to follow the US in exiting the Paris Agreement and abandon emissions targets to “save” the Liberal Party. It is true, as Mr Abbott said, that Australia would never have signed the Paris Agreement had the US not been a party to it.

Closer to home, the Nationals, in a two-page list of demands agreed in their partyroom last week and obtained by Joe Kelly, are demanding the building of three new baseload power stations in which the commonwealth or the states would hold equity. A “government-owned company model”, used to deliver other vital infrastructure including the western Sydney airport, would keep any new power stations off budget. The Coalition partner also wants part of a $5 billion fund available to coal, gas or traditional hydro projects capable of delivering “electricity 24 hours a day, seven days a week, regardless of weather conditions” to deliver shorter-term improvements to the energy market. The fund would help extend the life of power plants, boost their capacity and cut emissions.

Regardless of the former prime minister’s personal motivation, it is alarming but true, as Mr Abbott said on Monday, that the Turnbull government will be relying on the support of Labor states to back its ­national energy guarantee at next month’s crucial COAG meeting. Should the states, some of which are committed to renewable energy targets of 50 per cent, withhold their support, or offer it with unacceptable conditions, or if Mr Turnbull and Energy Minister Josh Frydenberg fail to secure Coalition support for the NEG, the government could be left scrambling without an energy policy to meet one of its main responsibilities — ensuring the provision of reliable and affordable power. The fact Australia faces such a possibility reflects woeful planning at state and federal level.

The Nationals’ pragmatic stance is well timed. It comes as coal is set to regain its position as our biggest export earner due to rising prices and surging demand from Asia. China, Japan, India and Indonesia are among nations that have turned to cleaner coal technology to meet their expanding energy needs. Decision-makers here should not be blind to what is happening in other parts of the world. As we noted a fortnight ago, “this is a lesson Australia appears doomed to learn the hard way”. And despite the determination of some states to lock up their gas resources, LNG exports also are booming.

While much of the national debate has been anchored in the politics of climate change and the Paris Agreement to limit global warming to less than 2C, the needs of business and households for reliable baseload power at competitive prices have been overlooked in some quarters. This should not be the case in a nation rich in energy resources. Nothing that Australia does, as Mr Abbott writes today, will make the slightest difference to climate. It is also true that China, responsible for 28 per cent of global emissions, and India (7 per cent) have made no Paris commitment and the US (15 per cent) has pulled out. Australia is on track to meet its Paris target; but it is time to regain perspective. Emissions abatement should not jeopardise living standards.