He’s baaaack:
Fresh from his faction’s resounding victory in the NSW Liberal Party over the weekend, an emboldened Tony Abbott has switched his focus to torpedoing the Renewable Energy Target and the government’s plans to introduce a Clean Energy Target.
Mr Abbott travelled to Gladstone, Queensland, on Monday to tour an aluminium smelter, advocate the construction of a coal fired power station and rail against energy policy which seeks to reduce carbon emissions.
In the clearest signal yet he plans to blow up attempts by the government to adopt a clean energy target, as recommended by chief scientist Alan Finkel and supported by business and industry, Mr Abbott said policy must focus on providing power, not curbing emissions.
“We’ve been going in the wrong direction for far too long, for the best part of a decade,” he told radio 2GB, a reference to the RET.
It’s a false binary of course. We can still have jobs if we retain the RET, the CET or a carbon price as we decarbonise generation capacity. Indeed, as the renewable battery killer app becomes economic over the next five years we can have a lot more jobs and cheaper power than if we build a few lousy coal power stations.
That won’t lower power bills anyway. Gas sets the marginal cost for electricity not coal, owing to where it sits in the wholesale electricity market bid stack. See Australian Energy Market Operator description below:
A lesson RIO could learn:
Big miner Rio Tinto says east coast electricity generators have too much market power, which they are exercising to deliberately drive up prices, and that limits on ownership or stricter regulation are needed.
…“The current regulatory framework of the NEM appears unable to curb the clear exercises of market power which have become increasingly apparent with shifts in ownership, asset closure and in some cases, consolidation of generators whose behaviour is unconstrained by considerations of affordability of electricity,” Mr Cox said in the submission.
The call follows from Rio’s subsidiary Tomago Aluminium (which operates in the Hunter Valley and is the biggest electricity user in NSW) push for policies that would promote more coal-fired power, partly blaming generators for deliberately pushing up power prices to levels where it would have to cut production and, possibly, jobs.
In May, Rio chief Jean-Sebastien Jacques hit out at what he called the “absolutely wrong” behaviour of the Queensland’s state-owned power industry and called on the Federal Government to intervene after the Rio-controlled Boyne Island smelter at Gladstone cut production and 100 workers because of soaring power prices.
While I don’t doubt that the perverse incentives of the state-owned generators are stimulating a gouge. The main issue is the price of gas is raising the marginal price of power so far above that of coal it is enabling generators to game the NEM at will.
That the gas price is spiked by the LNG exports from Gladstone is an irony lost on RIO.
