Via the AFR:
The Turnbull government is fast-tracking a policy to underwrite a new coal-fired power station as it seeks to win the support of wavering conservative MPs for the National Energy Guarantee at Tuesday’s Coalition party room meeting.
Australian Competition and Consumer Commission chairman Rod Sims, who recommended the government underwrite new dispatchable power generation to boost competition and lower prices, will brief Nationals MPs on the idea at their separate meeting on Monday.
At the same time, Treasurer Scott Morrison and Energy Minister Josh Frydenberg have started work on options to implement the recommendation which, a government source said, would see the government “underwrite new generation, possibly including coal”.
Coal power is not “dispatchable”. So any new public power station will either lose money hand-over-fist switching on and off too late or it will remain switched on permanently (subsidised by you and I) and displace some other marginal supply. That will be gas.
Thus it could help lower power prices versus today’s outlandish price spikes. However, the counter-factual is that renewable plus storage options continue to fall in price and within a few years are cheaper than coal:
Thus any new coal power station that takes 5-10 years to build will be obsolete and keeping prices higher than otherwise before it generates a single watt of power. This is why no private capital will do it. And all of this before we consider that the price of coal will keep rising as carbon is priced globally, one way or another.
It’s all politics and nonsense. With Barnaby Joyce leading the way at The Age:
Barnaby Joyce says he will support the Turnbull government’s National Energy Guarantee on the condition that it creates a ‘plan B’ to cut electricity prices in case the NEG doesn’t work as promised.
…Mr Joyce proposed the government create a divestment power option as a threat to break up the energy firms in the event that they fail to cut power prices.
“It would give us the capacity to say to the these companies: ‘Don’t put ’em up or we will break you up’,” he said.
That’s exactly the kind of stuff that should be pointed at the gas cartel not the gentailers. It is the price of gas that has driven power prices up. The power oligopoly is making the most of it, sure, but they’re not the root cause.
But that would not win votes in the coal and gas heartland of One Nation in central QLD where the Nats are dying.
