Will ScoMo lift power prices via gas or coal subsidies?

It’s a tricky question. Which uneconomic, species threatening fuel will you subsidise to build a white elephant power plant?

Scott Morrison’s most senior ministers are split over subsidising a new coal-fired power station, after Josh Frydenberg rejected Nationals demands for the government to support a “modern” plant in the NSW Hunter Valley.

The Treasurer’s opposition to funding new coal came as Nationals leader Michael McCormack declared the government would “absolutely look at” proposals for a power station if a state government or private company pitched one.

…Mr Frydenberg said decisions about coal-fired power stations and their futures would be commercial ones left to the private sector.

…The Nationals reignited the climate wars within the Coalition after the party’s backbench unveiled its manufacturing 2035 blueprint, which calls for a doubling of manufacturing jobs within 15 years and a “modern” coal-fired power station in the Hunter.

…Nationals senator Matthew Canavan, who chairs the backbench policy committee that ­released the manufacturing plan, said it was “absurd” to be considering gas in the Hunter and not coal.

…Trade Minister Dan Tehan said there would be “very open and frank” discussions about emissions reduction with the new Biden administration and insisted there would be “a lot of like-mindedness” in the approaches taken by Australia and the US.

Energy Minister Angus Taylor and US President Joe Biden’s climate envoy, John Kerry, have agreed to establish a joint working group to reduce carbon emissions.

This conversation is straight from The Betoota Advocate. Both coal and gas are dead as fuels for stationary power. This is driven by the pure economics of alternative energies:

Australian energy costs compared

In five years it will be much cheaper:

Price of solar and batteries over next 5 years

If it goes the way we think it will, renewables plus full storage will be more than 60% cheaper than coal and gas:

Price of solar and batteries over next 5 years

Recently I hopefully suggested that:

instead of bullshitting, policymakers start planning for major economic stimulus and economic restructuring for QLD and the Hunter.


David Llewellyn-Smith


  1. Display NameMEMBER

    The LNP donors are going to sweat their assets on the backs of average Australians. The donors, many offshore could not give a fly fcuk about Australia. Unfortunately neither could the LNP if that interferes with their fantastic super packages, post political life sinecures etc.

  2. https://electriccarsreport.com/2021/01/vietnams-vinfast-unveils-3-all-electric-suvs-with-self-driving-capabilities/
    And here we are in Australia being told by Scotty From Marketing / Murdoch that we are great. Meanwhile a so-called developing country does this! We are allowing Murdoch to destroy our country’s future and we should all hang our heads in shame. (To rub salt into the wound this company bought the Holden testing facility when Australia gave up the idea of making cars in Australia.)

    • I think I can speak on behalf of the multitudes of other ex manufacturers in Oz, & say what’s been happening here for decades has been gut wrenching. This – is Especially Insulting!

    • NoodlesRomanovMEMBER

      Should play itself out – with the activist pressure on lenders, a lot of energy development has been shelved or delayed. This will lead to an increase in oil/gas/coal prices and they will have a sort term boom but the higher prices will give renewables a leg up.

  3. MathenomicMEMBER

    Hi David,

    I’m assuming these are Damian’s numbers (?); if you have the opportunity I have a few questions.

    Why is nuclear on the list in Australia given it’s a political impossibility? Were the LCOEs for all the technologies adjusted for local environmental conditions, economic variables, and local industry settings? e.g. most analytical data I’ve looked at myself uses an ideal or mean capacity factor for wind and solar that’s both (a) not geographically accurate and (b) not an appropriate statistical data point given skew and distribution; we don’t have a Nuclear industry and Lazard and most others are using a 40 year life where more realistic numbers internationally are 60-80 and the unit cost isn’t reflective of close neighbors like South Korea.

    Is there anywhere I can have a look at the key assumptions assuming they’ve been adjusted?