As Crikey fearlessly predicted last week, the government is now backing away from a bipartisan Clean Energy Target to provide certainty for energy investors, in favour of a more coal-centric policy. The goal is to portray Labor as the party of letting the lights go out, complete with clunky nicknames such as “Blackout Bill” and “Brownout Butler” (sadly, we’ve had “No Coal Joel”, not the more obvious “Flickering Lights Fitzgibbon”). Shorten and Butler, apparently, were in charge of Australian energy policy until a few months ago, so deserve the blame.
A deliberate attempt to avoid bipartisanship on energy will prolong exactly the uncertainty that has curbed investment in power generation capacity, exacerbating the growing under-supply of power. But, judge the government how you want, it’s looking at a persistent six-point polling gap that would see it tossed out of office in a flash if it were forced to an election; desperate times call for desperate measures.
As former Clean Energy Finance Corporation head Oliver Yates noted this morning, that the Prime Minister and his Energy Minister are trying to force AGL to keep open a power plant scheduled for closure in 2022 further adds to the uncertainty of companies considering investing in the new capacity that would replace Liddell. Indeed, perhaps AGL should have followed the prescription of the Finkel Review, endorsed by the government, and stayed silent until three years out from closure — 2019 — to reveal its plans for Liddell. Giving the market a generous seven years to prepare for closure has brought AGL nothing but trouble.
The government is thus undermining investment both at a macro and a micro level. Its refusal to agree to an overall energy policy, and the likelihood it will embrace one that, intentionally, Labor can’t accept, will deter all energy investment. Its thugging of AGL to keep Liddell open will deter investment in replacement capacity for that.
Politically, the perpetuation of under-investment in power generation will increase the risk of blackouts, which can then be blamed on renewable energy and Labor. Theoretically, this is a political gift that will keep on giving — you perpetuate the problem that you can blame on your opponents. But it only works until the media and voters work out that it’s your politicking that is causing the problem. Meantime, we’re stuck with the world’s dumbest energy policy, which gives us high prices, poor reliability and rising carbon emissions.