From pathological liar, Josh Frydenberg today:
When the Coalition came to government in 2013, it was bequeathed an energy mess. Retail prices had doubled, having increased each and every year, the renewable energy target had ballooned to 45,000 gigawatt hours and we were saddled with the destructive carbon tax.
Since then we abolished the carbon tax, reduced the RET, reined in the networks, put more gas into the market, increased transparency for retail customers, announced Snowy 2.0 and, most important, turned the corner on power prices. Wholesale electricity prices are down almost 30 per cent this year and large industrial gas users, according to the Australian Competition & Consumer Commission, are seeing up to a 50 per cent fall in contract prices. As of July 1, households and businesses across Queensland, NSW and South Australia will start to see their prices fall. It’s working, with more relief to come.
The missing piece in the power price jigsaw, however, is the integration of energy and climate policy. This has eluded us as a nation for more than a decade. Unfortunately, the price for political intransigence has been investment uncertainty, community disenchantment and a less reliable, more expensive power system. The NEG represents the first time we have a policy that is designed by the experts, comprehensively backed by business, supported by states and with modelling indicating it will cut prices and raise reliability. All the ingredients for a durable long-term solution.
OK, Labor did do a poor job on energy in two crucial ways. It allowed massive network capital misallocation in the name of gold-plating and did nothing to prevent the east coast gas export cartel from forming. The first was a state issue so can be blamed as much on the Coalition. The second is real.
However, Labor also installed a world-leading carbon pricing regime that was Ferrari versus the NEG’s horse and cart, and it had Australia on track to well and truly meet Paris-like carbon targets with scope for more at lowest possible cost.
Compare this with the Coalition which trashed the carbon price then allowed an east coast gas cartel to run riot while it did nothing. Even today the gas price is 300% higher than it was a few years ago and the electricity price is double that under Labor. It also lurched back and forth between on climate change mitigation as the twin heads of its leadership gorgon tore at each other’s throats and has overseen the early stages of a massive overshoot of Paris climate targets, let alone any reductions that will save the planet.
For Frydenberg to point the finger at anyone for energy chaos is scary.
Now for the NEG. What does it add?
- higher costs of compliance;
- mass confusion and complexity in the National Electricity Market (NEM), the only thing that does work in the energy system;
- lower competition among dominant “gentailers”;
- a little more life for extant dinosaur coal-fired power plants;
- a little less renewables investment;
- a big miss on Paris targets;
- added rigidity in responding to climate change targets via a mandated 5 year review,
- higher energy prices via all of the above.
And what does it deliver? The appearance of agreement on climate change when the Coalition troglodytes have already rejected it, collapsing its only reason for being.
We’re simply better off without the mock agreement. States should set their own carbon mitigation targets and let the crashing cost of renewables and storage revolutionise energy.
Embrace the chaos. It’s much better than Frydenberg’s pretense.
