Labor can humiliate Coalition energy chaos with a pen stroke

And surely it will do so. Two stories today show the lunacy, via AFR:

The Morrison government has responded to backbench and industry anger by softening its proposed “big stick” laws to forcibly divest energy companies, but business remains hostile and there is no guarantee the laws will pass Parliament.

In another day of energy policy chaos, former prime minister Malcolm Turnbull, backed by key business groups, called on the Coalition to re-embrace the National Energy Guarantee, saying power prices would be higher without it.

But the government is refusing to budge on the NEG and has no sympathy for arguments against forced divestment powers.

There goes the Minister for Cheap Energy. The Government now has no policy at all.

Meanwhile, at The Australian comes a warning Labor must heed:

As Labor looks to revive the government’s now-abandoned national energy guarantee — underpinned by a 50 per cent renewable energy target — the Paris-based International Energy Agency says Australia needs to ensure an “avalanche” of clean energy supply is backed up by firm generation to keep the lights on. It also cautioned Australia about the perils of introducing a carbon price out of step with other developed nations as Labor mulls over its policy on the issue in the lead-up to the election amid a renewed campaign against a “carbon tax” by the Morrison government.

“It is important that the increasing share of renewables — especially solar and wind — are integrated into the grid in the right way,” IEA executive director Fatih Birol told The Australian.

“Power systems without back-up have accidents in terms of security of supply. It’s definitely not good news for the citizens and not good news for the reputation of the grid.”

Quite right. The NEG can help if its emissions intensity cap is set right by boosting the various forms of power storage needed to stabilise a more renewables intensive grid.

But it won’t be enough for Labor’s first nor second terms as it drives renewables investment. For that we still need gas-fired peaking generation.

This is where Labor must fear to tread if it is to turn energy management into an asset of its government. All it needs to do is strengthen the Coalition’s Australian Domestic Gas Reservation Mechanism (ADGSM) by shifting its price target from the net-back export price to a fixed price in the $5-6Gj range. This will crash gas prices, liberate gas peaking power, crash electricity prices and stabilise decarbonisation.

It’s that simple. Chaos or the stroke of a pen.

David Llewellyn-Smith
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  1. And interestingly it’s the use of gas in the US that has led to such a reduction in coal and emissions. There it’s just business decisions despite the Trump swamp.

  2. As an interim step, strengthening “…the Coalition’s Australian Domestic Gas Reservation Mechanism (ADGSM) by shifting its price target from the net-back export price to a fixed price in the $5-6Gj range” is valid.

    Looking further out into the future the solution is clearly, at this point in time, pumped hydro backed up by wind and solar sourced from wind and solar farms around the country and from residential and other premises.

    The pumped solar solution also allows for divestiture of assets into many hands to allow for price competition to keep prices low. Using pumped solar sectors of the grid could potentially be independently managed by independent operators under a pumped solar plan reducing the potential for monopolization. Worldwide, the cost of providing pumped solar electricity is considered to be the optimal currently achievable for 24 hour base power supply.

    This is how it works:

    There are thousands of available pumped hydro sites across Australia and close to major points of energy consumption. Without encroaching on environmentally sensitive sites, those sites can be opened for tender for the construction of pumped hydro.

    The tendering process can include final ownership by local, state and federal governments and by private operators subject to price controls based on the average production cost price for all operators. This will ensure low costs of production is delivered to consumers.

    The following photo shows 22,000 suitable sites for pumped hydro in Australia with a total storage capacity of 67,000GWh.

    “…Australia has so many good sites for PHES that only the best 0.1% of them will be needed. Developers can afford to be choosy with this significant oversupply of sites,” according to Andrew Blakers, Bin Lu, and Matthew Stocks, at the Australian National University.
    See the astonishing photo and report at:

  3. haimona12MEMBER

    Even with lower gas prices, I’m passed the gas is a transition fuel argument. It probably made sense 20 years ago, but gas generation emissions are about 0.4 tonnes per mWh using conventional gas (and combined cycle) and likely much worse with unconventional gas (methane has a higher emissions factor too). Gas really only makes sense for district heating and cooling where thermal efficiency exceeds 80%. Snowy 2.0, if it proceeds (or even if it remains as a threat) makes it pretty much impossible to invest in new gas generation capacity.