Coal to save NSW from coal


The gas cartel is the reaming that keeps on giving. If you don’t fix the real source of an economic problem you will spend the rest of your days whacking the symptoms.

The Daily Telegraph can reveal that cabinet has now signed off on its response to the report handed to Energy Minister Penny Sharpe last month.

It is understood that one of those recommendations is the crucial advice that the government strike a deal to extend the life of the Eraring power plant to avoid shortfalls in supply.

…Last week, the cost of the Snowy 2.0 pumped hydro project was revealed to have blown out even further, after a revised estimate put the price tag close to $12 billion.

After Origin Energy announced plans to close Eraring as early as 2025, a number of options were put to the previous Coalition government which could have extended its life.

The Telegraph revealed last year that former Energy Minister Matt Kean knocked back one proposal – dubbed ‘Project Emu’ – which would have kept two of Eraring’s four generators running until 2028.

But the deal would have required the NSW government to pay 90 per cent of any losses Origin incurred by running two of Eraring’s four generators from 2025 to 2028.

Meanwhile. Premier Chris Minns on Monday shot down Mr Kean’s claims that it would have cost $3 billion to keep Eraring open for two years beyond its planned closure date.

What an amazing mess:

  • The energy transition was designed to have gas supplant coal while power storage caught down in cost. This would enable cheap and low-carbon output to firm intermittent renewables.
  • Instead, the gas export cartel sent all 0f the gas to China from 2014, including founding member, Origin Energy. Which also sponsored the Grattan Institute that advised the Gillard government against gas reservation in 2013.
  • As the local gas price skyrocketed into 2017, the Turnbull government panicked and commissioned the Snowy 2.0 project, which has now crowded out far cheaper power storage projects.
  • With power storage insufficient to firm rising intermittent renewable power, the gas all siphoned off by Origin and the cartel, NSW and VIC are resorting to publically sponsored coal-fired power to support the transition to no coal-fired power.
  • Origin Energy also owns Eraring, which will be publically subsidised!
  • It was all still salvageable when the gas cartel overreached into Ukraine War profiteering last year, but a gutless Albo gave in to it instead.

The entire process has lurched from scab grab, to panic, and back again, as white shoe brigades ream desperado politicians, the energy transition fails, and the cost of it goes from astronomical to virtually infinite.

We have another example of it today:


Nationals MPs are calling for the Coalition to oppose Labor’s legislation to toughen the petroleum resources rent tax, which is aimed at raising an extra $2.4bn over four years, an outcome that would force the government into negotiations with the Greens.

Australia is a standing warning about what not to do in the energy transition. The world’s best and cheapest transitional and renewables assets have been drowned in a cesspit of ruined policy, greed and economic damage.

And we haven’t cut our greenhouse gas output at all.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.