Building new coal-fired power stations should be market's decision, Turnbull says

Extract from The Guardian

Coal

PM says there is a role for government but ‘the goal should always be for investment decisions to be made by the market’

PM says as ageing coal-fired plants close the government must ensure there is enough baseload power, and the technology to deliver it ‘should be judged on its merits’. Photograph: Dan Himbrechts/AAP

Katharine Murphy Political editor
Thursday 20 July 2017 17.13 AEST Last modified on Thursday 20 July 2017 19.44 AEST

Malcolm Turnbull says it is better the market decides whether or not to build a new coal-fired power station in Australia rather than delivering that outcome through government intervention.
The prime minister was asked at an economic forum in Melbourne on Thursday whether the government would intervene to see new coal plants constructed, or whether it would leave that decision to the market.
Nationals, including the deputy prime minister, Barnaby Joyce, favour the construction of new coal-fired power, or the retrofitting of existing coal assets to extend their operating life, and have tied the future of coal to the resolution of a new national energy policy following the Finkel review.
The Minerals Council of Australia is also campaigning behind the scenes in Canberra to ensure “clean” coal is in the mix as the government responds to the Finkel review.
Turnbull was asked about the merits of government intervention on coal-fired power, and he told the forum: “Clearly it’s always better if the market delivers all of these solutions.”
The prime minister said as ageing coal-fired power plants exited the system, the government had to take steps to ensure there was sufficient baseload power in the grid, and the technology to deliver that outcome “should be judged on its merits”.
“There is an important role for government in energy policy, obviously, but the goal should always be for investment decisions to be made by the market, by participants in the market, on economic grounds,” the prime minister said.
He said there were opportunities for various technologies to be supported, either through the Northern Australia Infrastructure Facility, or through the Clean Energy Finance Corporation “but the aim has got to be I think, always, that you get the best outcome for consumers – and markets deliver that”.
Turnbull said the government had been forced in recent times to make heavy-handed interventions in the energy market, such as imposing export controls on gas – an intervention which gave him “no joy at all”.
“But the alternative is having a gas shortage on the east coast that would put tens of thousands of people out of work,” he said.
The prime minister’s disposition in favour of a market solution echoes similar comments in recent weeks from the Liberal frontbencher Craig Laundy, who said the government was not interested in building new assets, and the energy minister Josh Frydenberg, who has signalled the government will support coal-fired power if the market supports it.
The prime minister was asked on Thursday whether he favoured the central recommendation of the Finkel review – a new clean energy target – and he didn’t provide a definitive answer. He said the government had asked for more analysis on the policy.
In an interview with Guardian Australia last week, Joyce said he was prepared to argue that the Nationals should support the clean energy target if the Liberals agreed to set a threshold allowing high-efficiency coal in the mix.
Some Liberals are still opposed to the clean energy target – and the internal dissent has delayed a resolution of the issue.

Given the delay in Canberra, the Labor states have taken a preliminary step towards going it alone on a clean energy target that would apply after the current renewable energy target ends in 2020.