Crazy Coalition looks straight through energy solution

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They are tortured by energy even when the answer stares them straight in the face. At The Australian:

The Coalition’s energy wars erupted today in the joint Liberal-National party room, with Josh Frydenberg forced to defend the fact that COAG would see the National Energy Guarantee legislation before Coalition MPs.

Six Coalition MPs raised the subject of energy in the joint party room today, with at least one raising alarm over today’s Newspoll, which suggests voters believe Labor is the better party to maintain electricity supply and lower energy prices.

Tony Abbott tackled the Energy Minister over the government’s plan to take the detail of the NEG to COAG energy ministers for approval before the Coalition party room would have a chance to vote on it.

…Mr Frydenberg said action already taken by the government had lowered wholesale electricity prices by about 30 per cent, and this would begin flowing through to consumers.

Did the NEG lower prices? No. Did coal lower prices? No. It is gas. The only government action that has lowered wholesale electricity prices is domestic gas reservation. It remains to be seen whether that is enough to flow through to end users given contract lags.

Even when the answer stares them right in the face, actually delivers a stinging slap right across the cheek, these dills can’t draw the right conclusion.

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Gas generation sets the marginal cost of electricity. If you want cheaper power prices then give us more domestic reservation for cheaper gas. Ipso facto cheaper power.

The real issue is that they don’t want cheaper energy.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.