Josh Frydenberg says it is too soon to say if the Coalition party
room will support a clean energy target after a three-hour extraordinary
meeting in which a number of government colleagues raised concerns
about the core recommendations of the Finkel review.
Speaking on ABC on Tuesday night, the energy and environment minister said MPs were “concerned about the future of coal” and about rising electricity prices, and he stressed the proposed clean energy target did not prohibit the building of new coal-fired power stations.
A number of conservative MPs spoke during the meeting, including the former prime minister, Tony Abbott, who had pre-empted Tuesday night’s discussion by declaring the clean energy target a new tax on coal, and the chairman of the Coalition’s environment and energy committee, Craig Kelly.
Abbott queried during Tuesday night’s meeting whether the government would be better off buying the Hazelwood power station than embarking on a wholesale rethink of energy policy, but was told the power plant was in the process of being dismantled.
The prominent Victorian Liberal moderate, Russell Broadbent, also made a strong intervention during the meeting arguing against policy change that would push up power prices.
Speaking on ABC on Tuesday night, the energy and environment minister said MPs were “concerned about the future of coal” and about rising electricity prices, and he stressed the proposed clean energy target did not prohibit the building of new coal-fired power stations.
A number of conservative MPs spoke during the meeting, including the former prime minister, Tony Abbott, who had pre-empted Tuesday night’s discussion by declaring the clean energy target a new tax on coal, and the chairman of the Coalition’s environment and energy committee, Craig Kelly.
Abbott queried during Tuesday night’s meeting whether the government would be better off buying the Hazelwood power station than embarking on a wholesale rethink of energy policy, but was told the power plant was in the process of being dismantled.
The prominent Victorian Liberal moderate, Russell Broadbent, also made a strong intervention during the meeting arguing against policy change that would push up power prices.
One Liberal MP told Guardian Australia the bulk of the concern expressed related to the risk that the clean energy target would increase power prices. “We will wear that for the next decade – if prices go up,” the MP said.
After giving a presentation to MPs early on Tuesday morning, Frydenberg took the chief scientist, Alan Finkel, to brief the backbench energy committee ahead of the special party room discussion on Tuesday night, in an effort to head off significant dissent.
Some government MPs went into Tuesday night’s meeting angry at what appeared to be an effort by the prime minister, Malcolm Turnbull, to limit discussion about the Finkel review during the regular Coalition party room meeting on Tuesday morning.
The core recommendations of the Finkel review received support earlier on Tuesday from the Nationals leader, Barnaby Joyce, who told Sky News that “even the National party, to a point” wanted to help the government “land” the policy that has wide support among industry.
Turnbull lost the leadership of the Liberal party in 2009 over a bitter internal struggle over emissions trading. The Nationals position on the clean energy target is a critical factor in whether the policy flies or dies.
National party MP and chair of parliament’s multiparty committee on energy and environment Andrew Broad spoke broadly in favour of the Finkel review during the party room meeting, and said the general consensus of the meeting was that status quo was not acceptable because it was stifling investment.
“The general consensus was that the old days of opposing everything and a big tax on everything are gone,” he told Guardian Australia.
“Those views weren’t really reflected, the concerns were more about whether this policy is going to work or whether it is a Band-Aid over an electricity grid system with strcutural flaws.
Broad said while he was hopeful of his party room landing some energy policy, he had yet to see an opposition go along with a policy in the national interest – including Coalition opposition.
“Even if we do land on a sensible, sound position, I haven’t seen in any point of my career, where oppositions say for the sake of national interest, we will go along it – I just see how partisan it has become on both sides.”
The special party room meeting comes as release of the modelling behind the Finkel report shows that an emissions intensity scheme – a form of carbon trading favoured by many industry stakeholders – would achieve lower cost greenhouse gas abatement and the CET would require “additional policy support” to reach emissions targets.
At the conclusion of the party room meeting Frydenberg said the conversation had been “valuable and constructive” and had been intended to share information rather than formally decide whether to adopt a CET.
Responding to reports that most MPs either rejected the policy or were skeptical of its benefits, Frydenberg denied there had been a “backbench revolt”.
“There was an overwhelming feeling among those in the party room tonight that business as usual is not an option,” he said. “Many of my colleagues spoke of their personal experiences dealing with manufacturers, cafe owners, heavy industry, including the aluminium sector dealing with higher prices.”
Frydenberg said Coalition members had welcomed Finkel’s recommendations to require renewable energy plants to provide more storage and for three years’ notice of closure of coal power plants.
He said it was too early to say if they would support the CET, noting that they want to know more and their number one preoccupation is “rightly price”.
Frydenberg acknowledged colleagues were concerned about coal because it is a “critical supply of base load power”, but noted under the Finkel plan it would still provide more than 50% of power by 2030.
The environment minister said Abbott’s position to “drive down prices and ensure coal will continue” was well known but said the CET was “absolutely not” a tax on coal.
“Dr Finkel has made it very clear – he’s not putting in place any prohibition on coal or other forms of generation capacity, what he’s doing is placing incentives for lower emission generation.
“It’s not a price on carbon, it’s not a tax on coal.”
Earlier on Tuesday, Joyce said that under the Finkel plan, coal “would not have the advantage that other forms [of electricity] would, but it wouldn’t have any sort of persecutory penalty placed against it”.
Asked about Abbott’s view that a CET would be a tax on coal, he repeated that there was “no penalty placed on coal”.
Joyce predicted that Labor would oppose the CET if the Coalition adopted it, and said by contrast the government was “moving to try and make sure we land this”.
“Even the National party to a point. We’re moving ... We’re all doing our bit. And the Labor party should do their bit.”
The modelling, released on Tuesday evening, found that the lowest cost policy would be an emissions intensity scheme, which was already rejected by the government in November as the Finkel review was just starting.
The EIS was “followed closely” by the CET, with an EIS costing $7.50 tonne of carbon dioxide abatement, compared with $10.50 for the CET.
Although the report found the CET would give lower retail electricity prices, it said it would be more expensive overall due to investment in new plant.
“Although emissions are reduced under all scenarios, the 2030 target is not met without some additional policy support,” it said.
Limiting the life of coal power plants to 50 years by itself would not meet targets by 2030, but the modelling found given the large number of retirements after 2030 would help meet targets after that date.
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