Extract from The Guardian
South Australia has called on New South Wales
to join the Labor states in working up their own, coordinated, clean
energy target if the Turnbull government cannot resolve its internal
brawl about the Finkel review.
Ahead of a meeting of energy ministers on Friday, the SA energy minister, Tom Koutsantonis, said all state governments had a “responsibility to act” given the chief scientist, Alan Finkel, had delivered a credible roadmap to lower energy prices, increase network security and reduce emissions.
He said NSW was particularly exposed by the policy vacuum and could face power shortages this summer.
“What [NSW] has to keep in mind is they have the highest penetration of coal-fired generation in the world and the only price signal they have is the commonwealth renewable energy target,” Koutsantonis told Guardian Australia.
“There’s no other price signal to incentivise any other form of base load generation. Now, unless they are going to put batteries in, or some form of storage in, they are going to be short, and they are probably going to be short this summer.
“Unless the market gives them a signal to go out and build new, lower emissions generation like gas, nothing is going to happen and, if nothing happens, we’ll have what happened last summer when they had to load shed the Tomago aluminium smelter because they were running out of power”.
Koutsantonis said “no board, no energy company in the world, is going to invest unless they know what the carbon price is”. He said that, if the NSW government took the politics out of it, and made a purely rational decision, it would have to join its state counterparts in trying to resolve the post-2020 framework.
The federal energy minister, Josh Frydenberg, issued a warning to the Labor states on Thursday to slow down after they flagged going it alone on the clean energy target recommended in the Finkel report.
Frydenberg is not in a position to recommend any course of action on the clean energy target at Friday’s meeting, because the Turnbull government is yet to resolve its position.
The federal minister said on Thursday the haste from the Labor states was unreasonable, given Canberra had already adopted most of the recommendations of the Finkel report in only a matter of weeks.
“The reality is national solutions are required for national problems, and one of the real challenges we have at the moment is the states have been going it alone, creating inefficiencies and inconsistencies in the system,” Frydenberg told Guardian Australia.
“Having just received the report barely four weeks ago, we have, in record time, adopted 49 of 50 recommendations, and we will continue to work through our internal processes.
“We don’t need to rush it.”
But Koutsantonis said there was no reason for the states not to press ahead.
“The Council of Australian Governments as a whole commissioned Finkel and the commonwealth government chose him [to conduct the review],” he said. “He’s come away with 50 recommendations that are designed to lower power prices, increase reliability and security and give us a pathway to decarbonise.
“The next logical step is to ask the Australian Energy Market Commission to model how you’d implement a clean energy target, how it would work and what the measures are to make sure its a mechanism with appropriate structure.
“If the commonwealth says no, the states have a responsibility to act, because we’ve got a report from our chief scientist saying this is how you lower power prices and meet the nation’s climate targets.
“These aren’t climate targets signed up to by Bill Shorten – these are targets Malcolm Turnbull signed up to.”
Frydenberg has renewed criticisms going in to Friday’s meeting about state bans on gas exploration and about practices by Queensland’s government owned generators that have increased power prices.
He said, over the first five months of 2017, Queensland electricity consumers paid the highest wholesale prices in the national electricity market – 30% above the average.
Canberra says this is because of improper market practices, Queensland says it’s due to price spikes during heatwave conditions.
Frydenberg said the states were trying to have it both ways, ignoring some Finkel recommendations, such as opening up more gas supply “while getting hot under the collar about the clean energy target”.
He said state governments were in “no position to lecture the commonwealth” given the behaviour by government-owned generators in Queensland and “mindless bans on gas development”, which pushed up electricity prices.
Frydenberg said the commonwealth took its commitment to emissions reductions “very seriously” and had presided over important changes, like a five-fold increase in investment in renewables in 2016, passing legislation to phase out hydrofluorocarbons, achieving abatement under the emissions reduction fund and multi-billion investments through the Clean Energy Finance Corporation.
As well as the conflict over the clean energy target, the federal minister will also face resistance on Friday from Queensland and NSW to his proposal to abolish limited merits review.
Limited merits review is a legal process that has the effect of pushing up power prices to consumers. But the resistance on Friday will be futile, because Frydenberg has the numbers in the federal parliament to make the change he is proposing.
South Australia led the public campaign for many years for an emissions intensity trading scheme for the electricity sector but Koutsantonis has now resigned himself to the clean energy target being the best policy the states are likely to get.
“The CET is not the best option ... but, unless you have it, no one is building anything except more renewable energy, which isn’t bad, but it’s not dispatchable yet,” the SA minister said. “I think we have to press ahead with the CET. I don’t think there is another option”.
“You are never going to get the politics out of this debate but we have to compromise”.
Ahead of a meeting of energy ministers on Friday, the SA energy minister, Tom Koutsantonis, said all state governments had a “responsibility to act” given the chief scientist, Alan Finkel, had delivered a credible roadmap to lower energy prices, increase network security and reduce emissions.
He said NSW was particularly exposed by the policy vacuum and could face power shortages this summer.
“What [NSW] has to keep in mind is they have the highest penetration of coal-fired generation in the world and the only price signal they have is the commonwealth renewable energy target,” Koutsantonis told Guardian Australia.
“There’s no other price signal to incentivise any other form of base load generation. Now, unless they are going to put batteries in, or some form of storage in, they are going to be short, and they are probably going to be short this summer.
“Unless the market gives them a signal to go out and build new, lower emissions generation like gas, nothing is going to happen and, if nothing happens, we’ll have what happened last summer when they had to load shed the Tomago aluminium smelter because they were running out of power”.
Koutsantonis said “no board, no energy company in the world, is going to invest unless they know what the carbon price is”. He said that, if the NSW government took the politics out of it, and made a purely rational decision, it would have to join its state counterparts in trying to resolve the post-2020 framework.
The federal energy minister, Josh Frydenberg, issued a warning to the Labor states on Thursday to slow down after they flagged going it alone on the clean energy target recommended in the Finkel report.
Frydenberg is not in a position to recommend any course of action on the clean energy target at Friday’s meeting, because the Turnbull government is yet to resolve its position.
The federal minister said on Thursday the haste from the Labor states was unreasonable, given Canberra had already adopted most of the recommendations of the Finkel report in only a matter of weeks.
“The reality is national solutions are required for national problems, and one of the real challenges we have at the moment is the states have been going it alone, creating inefficiencies and inconsistencies in the system,” Frydenberg told Guardian Australia.
“Having just received the report barely four weeks ago, we have, in record time, adopted 49 of 50 recommendations, and we will continue to work through our internal processes.
“We don’t need to rush it.”
But Koutsantonis said there was no reason for the states not to press ahead.
“The Council of Australian Governments as a whole commissioned Finkel and the commonwealth government chose him [to conduct the review],” he said. “He’s come away with 50 recommendations that are designed to lower power prices, increase reliability and security and give us a pathway to decarbonise.
“The next logical step is to ask the Australian Energy Market Commission to model how you’d implement a clean energy target, how it would work and what the measures are to make sure its a mechanism with appropriate structure.
“If the commonwealth says no, the states have a responsibility to act, because we’ve got a report from our chief scientist saying this is how you lower power prices and meet the nation’s climate targets.
“These aren’t climate targets signed up to by Bill Shorten – these are targets Malcolm Turnbull signed up to.”
Frydenberg has renewed criticisms going in to Friday’s meeting about state bans on gas exploration and about practices by Queensland’s government owned generators that have increased power prices.
He said, over the first five months of 2017, Queensland electricity consumers paid the highest wholesale prices in the national electricity market – 30% above the average.
Canberra says this is because of improper market practices, Queensland says it’s due to price spikes during heatwave conditions.
Frydenberg said the states were trying to have it both ways, ignoring some Finkel recommendations, such as opening up more gas supply “while getting hot under the collar about the clean energy target”.
He said state governments were in “no position to lecture the commonwealth” given the behaviour by government-owned generators in Queensland and “mindless bans on gas development”, which pushed up electricity prices.
Frydenberg said the commonwealth took its commitment to emissions reductions “very seriously” and had presided over important changes, like a five-fold increase in investment in renewables in 2016, passing legislation to phase out hydrofluorocarbons, achieving abatement under the emissions reduction fund and multi-billion investments through the Clean Energy Finance Corporation.
As well as the conflict over the clean energy target, the federal minister will also face resistance on Friday from Queensland and NSW to his proposal to abolish limited merits review.
Limited merits review is a legal process that has the effect of pushing up power prices to consumers. But the resistance on Friday will be futile, because Frydenberg has the numbers in the federal parliament to make the change he is proposing.
South Australia led the public campaign for many years for an emissions intensity trading scheme for the electricity sector but Koutsantonis has now resigned himself to the clean energy target being the best policy the states are likely to get.
“The CET is not the best option ... but, unless you have it, no one is building anything except more renewable energy, which isn’t bad, but it’s not dispatchable yet,” the SA minister said. “I think we have to press ahead with the CET. I don’t think there is another option”.
“You are never going to get the politics out of this debate but we have to compromise”.
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