Albo’s cowards aren’t doing shit about the energy war-profiteering:
Federal Energy Minister Chris Bowen just spoke to the media after a meeting with his state counterparts.
They have agreed to three points of action that he says won’t deliver immediate relief to the current soaring energy prices, but will help Australia in the long-term goal to decarbonise the energy grid.
The ministers, advised by expert agencies, agreed to expedite development of a “capacity market”, which would force retailers to pay generators to invest in power projects that could quickly be called on when the wind wasn’t blowing and the sun wasn’t shining.
The Australian Energy Market Operator will be granted new powers that enable it to store gas to help prevent the current shortages that have sent energy prices spiralling in recent weeks.
All states and territories have committed to reduce emissions in their power grids and hit net-zero emissions by 2050, and Bowen said the ministers all agreed to develop a national transition plan to coordinate and guide their journey to decarbonise the energy grid.
“We need more transmission. We need more renewables we need more storage,” Bowen said.
He backed the Australian Energy Market Operator’s road map, known as the integrated systems plan, which sketches out how the transition would take place.
“Now we have the integrated systems plan in Australia which was which is a world’s best practice document in relation to energy train electricity transmission, about poles and wires and big transmission across the country,” Bowen said.
Jeez, how badly thought out is that? Let’s buy gas when it’s off the charts expensive to address some future crisis while making this one worse.
At least the capacity mechanisms makes more sense. At current prices, gas firming power is nearly four times more expensive than renewables plus battery:
So pushing retailers to include the purchase of more power storage is good.
But, as the above prices show so clearly, that was going to happen anyway. What we need is regulation to fix failed markets in the short and medium term. The Teals emerged late yesterday to talk sense:
Incoming Wentworth MP Allegra Spender has clashed with Australian Workers’ Union boss Daniel Walton about the need for government support to help lift gas supply to ease the energy crisis but they have found common ground on the need for action like a windfall tax on oil and gas producers to help struggling consumers.
Ms Spender told the Credit Suisse Australia Forum that the “supernormal” profit being made by gas producers because of extreme events such as the Ukraine war were coming at a price to consumer bills and jobs.
“It fails that social licence piece and it fails the pub test,” Ms Spender said of the profits.
“Australian consumers will go, ‘well, why is it that my power bills are going like this? It’s all coming from Australia.’”
She called for “strong responses from the gas companies and from government”, with “all options on the table”.
“I’d get those people together and have very robust and constructive discussions right now.”
Mr Walton, national secretary of the AWU, said the east coast gas market had “fundamentally failed”, saying Shell last week offered gas at $100 a gigajoule, while AGL is offering more than $40/GJ for customers automatically transferred from failed NSW gas retailer Weston Energy.
“We’ve seen extraordinary gouging going on,” he said, adding he had been told of manufacturers paying an extra $100,000 a day for gas, and of some in Newcastle shutting off production during parts of the day because of the electricity wholesale price.
“We have said for a long period of time, that the big gas companies, multinational gas companies … are never going to agree to give up anything other than maximum profits.
“I simply don’t subscribe to the view that we should just cop that as a nation and say, no worries, well, just let them do that.”
…Woodside Energy’s head of new energy Shaun Gregory said the Petroleum Resource Rent Tax already acted as a levy on super-profits and joined other petroleum industry bosses in warning against “kneejerk” reactions that would harm stability for investment.
Woodside can be forgiven for thinking this is all so very new. It only just joined the east coast gas cartel by acquiring BHP’s share of the Gippsland JV with Exxon.
But we are seven years into the gas crisis, Mr Gregory, and the super-profits tax that miners wrote for themselves via the RSPT resolution doesn’t do squat.
As for Ms Spender’s idea, it will work to effectively shield the local economy from international prices so long as:
- the super-profits tax is recycled as energy subsidies for end-users;
- it includes coal as well as gas.
I wouldn’t call it a tax, either. It’s a Ukraine War Equalisation Levy (UWEL) that takes the war windfall and gives it back to those being gouged. An “equalisation levy” won’t frighten Albo’s cowards quite so much, either.
Notwithstanding that, a UWEL could be better than domestic reservation, if it benchmarks oil and gas profits to pre-Ukraine war prices.
That would raise a lot more dough than just the domestic energy gouge. It would take some of the export windfall as well and that would be a terrific national interest outcome.
I can’t see Labor having any trouble with the senate on such a proposal. Greens and Teals would embrace it.
Only Albo’s cowards are the problem.