If you’re a betting person, put some money on Malcolm Turnbull’s “Snowy 2” pumped hydro idea never, ever happening. It’s an announcement of a feasibility study for an unfunded project involving tunnelling in sensitive areas that would take years to approve, let alone complete. You’ll get more power from burning the media release it’s written on.
Which is a pity, because Turnbull’s summit with gas industry executives yesterday was his best achievement of recent months. Turnbull’s first challenge was to not make the existing situation worse — which is what the Coalition has managed to do at every step on energy policy for years now. In essence, Turnbull told the big gas exporters to fix the problem of domestic supply or face the heavy hand of government intervention, complete with the threat of export controls (this is, by the way, the first time since 2009 that the Coalition has put its faith in industry mechanisms to deliver efficient energy outcomes rather than impose a heavy-handed big government intervention).
The opportunity to attack state and territory governments for gas development moratoria wasn’t missed, but — highly unusually — the word “Labor” wasn’t once uttered by the Prime Minister, marking a rare departure from his constant politicisation of the issue. If that means someone in the PMO worked out that it would be a bad look using a national crisis to attack your opponents, then perhaps there’s hope for political management within this government.
Having displayed good judgement and, perhaps, some old expertise as a negotiator from his business days, Turnbull turned to the gift wrapping — an announcement about investing in pumped hydro in the Snowy Mountains Scheme. To be fair, Turnbull regularly spoke about pumped hydro while he was trying to use clean coal to attack Labor, but it’s hard to avoid the impression the Snowy announcement is designed to counter the clean coal-derived impression that Turnbull is now entirely a captive of the far right.
That’s likely to be the total impact of the announcement. Where is the money coming from? Existing renewable energy funding, meaning the result is no new capacity? Are NSW and Victoria on board? How will they fund it? How long will it take to approve such a massive project? How much longer to build? And what will happen to the energy market in the intervening five to 10 years?
Still, good thing the Howard government caved in and didn’t agree to Morris Iemma’s proposal to flog the Snowy Hydro, eh?
As for the suggestion from backbenchers that nuclear power should be thrown into the mix, take note of the names involved, according to the Fairfax report: Andrew Broad, James Paterson, Tony Pasin, Tim Wilson, Chris Back, Craig Kelly, Eric Abetz, Andrew Hastie, Warren Entsch, Bridget McKenzie, Rowan Ramsey. Take note and remember that none of them can count. Nuclear power in Australia is by far the most expensive energy option and would require massive government subsidies and loan guarantees (bigger even than clean coal), and take at least a decade to build once a site was identified (good luck to the relevant MP) and approvals completed — and then will run massively over schedule and over budget. Perhaps they should provide some remedial maths classes for the Coalition joint party room.
But whether it’s nuclear, pumped hydro or, as South Australia has announced, quick start gas, policymakers have reversed two decades of energy market policy and governments are now getting back into power generation. One of the key reform processes since 1990 is being rolled back. From the point of view of voters, who have got little but higher power prices to show for the immensely complex process of privatisation, corporatisation and marketisation of electricity, it’s not before time.