Australia’s ‘Green’ Dream Turns Political Nightmare: Coalition Backbench in Revolt Against Renewables

If history offers any lessons to our political masters, it has to include those occasions when a fed up proletariat rose up and overthrew those in charge. Australia may not literally be on the brink of a civil revolt. However, there is most certainly a revolt underway in the Federal Liberal/National Coalition government.

The Nationals have already staked their ground, rejecting the Clean Energy Target proposed by Alan Finkel and resolving to slash all subsidies to wind and solar.

Within the Liberal party, a growing band have recognised that their political futures depend upon what happens next in relation to Australia’s self-inflicted power pricing and supply calamity.

Leading the battle for common sense, and political self-preservation, is former PM, Tony Abbott.

Tony Abbott to ‘cross floor on energy’
The Australian
Simon Benson
20 September 2017

Tony Abbott has sent a warning to Malcolm Turnbull that he will cross the floor of parliament and vote against any government ­attempt to legislate a clean energy target, in a move that threatens to increase divisions in the Coalition partyroom over energy policy.

The threat came as the Prime Minister yesterday blamed Mr Abbott for subsidies flowing to energy companies under the Renewable Energy Target being “too generous”.

In an escalation of the ­backbench-led campaign to kill off plans for a CET, Mr Abbott this week relayed his staunch opposition to a senior member of the government, saying he could not in good conscience vote for a policy that continued to subsidise renewable energy sources.

Mr Abbott would likely be followed by as many as six backbench colleagues, with several telling The Australian they would be compelled either to abstain or to vote against the government on the issue.

The Australian has confirmed that Mr Abbott approached a senior member of the government this week to relay his intentions. It is understood the Prime Minister’s Office has been made aware of Mr Abbott’s position.

“He has let the government know his position,” a government source said. “He won’t vote for a clean energy target.”

The move by the former prime minister came as Mr Turnbull yesterday noted that the RET had been legislated in its current form when Mr ­Abbott was prime minister in 2015. He warned that the RET was “too generous” but said the scheme would remain in place until 2020, as it was legislated, and his government was considering a “future policy” towards 2030.

In a commentary article ­published in The Australian today, Mr Abbott appears to issue a rallying call to colleagues to intercede in the energy debate, claiming that the backbench would need to save the Turnbull government from itself.

Mr Abbott writes that it would be a political and economic disaster for the Coalition to go down the path of a new renewables target on top of the RET and a betrayal of Coalition policy that contributed to the election victory in 2013.

The partyroom battle over a CET is threatening to repeat the drama of the 2009 internal Coalition spill over an emissions trading scheme that then cost Mr Turnbull his leadership of the Liberal Party.

Mr Turnbull has so far refused to rule out a CET.

The government is awaiting a second report from the Australian Energy Market Operator on the state of coal generation across the country.

One backbench MP, in a warning to Mr Turnbull, said some backbenchers were “motivated” over the issue.

“We have been through this before,” the backbencher told The Australian. “You could assume that we are just as motivated as ­before.

“There would be a lot of people very upset if this was the path that he chooses.”

Up to 20 MPs voiced their opinion over the CET in a Liberal partyroom meeting last week.

Mr Turnbull has yet to land on the final shape of the government’s energy policy, in response to the Finkel report. It is not likely to go to the partyroom until the end of the year.

Opponents of the CET have seized on modelling accompanying the Finkel report that suggested a CET would lead to an energy mix of 42 per cent renewables by 2030. The CET would ultimately replace the RET.

“The only way to get our country back on track is to rid ourselves of the emissions obsession that has produced the wind-power-­induced blackouts in southern Australia,” Mr Abbott writes.

“For the past decade and a half, our power system has focused less and less on delivering affordable and reliable power — and more and more on reducing emissions.

“The Howard government’s original 2 per cent Renewable ­Energy Target was massively expanded under Labor. Then there was the emissions trading scheme, first proposed when Malcolm Turnbull was environment minister but introduced as a carbon tax under Labor.

“To his credit, Prime Minister Malcolm Turnbull is now talking about coal almost as much as pumped hydro and wants to keep open the next coal-fired power ­station that’s otherwise set to close.”
The Australian

 

Malcolm Turnbull’s assertion that “the RET had been legislated in its current form when Mr Abbott was prime minister in 2015”, is more than just a little disingenuous.

The legislation has been in its “current form” since the Rudd Labor government increased the total target to 45,000 GWh in 2010, comprising a large-scale target of 41,000 GWh (LRET) and the 4,000 GWh small-scale scheme (SRES).

In 2015, Tony Abbott, as PM, would have killed the entire scheme, if only a hostile Senate wasn’t dominated by Labor and the Greens. The reduction of the LRET to 33,000 GWh was a compromise struck with Labor, which recognised the fact that the 41,000 GWh target could never be met by 2020, that would have resulted in power consumers paying close to $2 billion each year in shortfall penalties; a political disaster for all players (see our post here).

While Turnbull is happy to snipe at the man he stabbed in the back two years ago, Malcolm should come clean and explain to his party and the public that his son, Alex is heavily invested in (a then near-bankrupt) wind power outfit, Infigen.

In one of the luckiest bets of all time (see our post here), Alex Turnbull managed to buy in when Infigen shares were a measly $0.20, just before his Dad signed Australia up to the Paris Climate Change agreement, after which they rocketed to $1.20. If Malcolm Turnbull seems to be pulling his punches on fixing Australia’s energy debacle, it may simply be about looking after his progeny?

At least Tony Abbott has no skin in the game.

Green Dreamers Have Failed Us
The Australian
Tony Abbott MP
20 September 2017

It’s bordering on absurd that a country with the world’s largest readily available reserves of coal, gas and uranium should have some of the world’s highest power prices and can’t be sure of keeping the lights on this summer; but that’s what happens when policy is driven by wishful thinking and green religion.

Soaring power prices, industries re-locating offshore, and the state-wide blackout in South Australia last year have finally forced us to face up to the obvious: we can’t avoid a choice between keeping the lights on and pretending that we’re saving the planet.

Reducing Australia’s emissions is not worthwhile if it closes down industries and puts power prices through the roof without having the slightest impact on the long term fate of the planet. Australia is responsible for just one per cent of global emissions and nothing that we do to reduce them will matter, given China and India’s understandable desire to lift their people’s living standards on the back of affordable, reliable energy (often provided by Australian coal).

For the past decade and a half, our power system has focussed less and less on delivering affordable and reliable power – and more and more on reducing emissions. The Howard government’s original 2 per cent Renewable Energy Target was massively expanded under Labor. Then there was the Emissions Trading Scheme, first proposed when Malcolm Turnbull was environment minister, but introduced as a carbon tax under Labor.

Finally, there’s the threat of new carbon taxes and 50 per cent renewable energy targets from Labor – and a 42 per cent Clean Energy Target if the Turnbull government adopts the Finkel Report. Between times, of course, the Abbott government abolished the carbon tax and reduced the RET but couldn’t get a senate majority to go further.

To his credit, Prime Minister Malcolm Turnbull is now talking about coal almost as much as pumped hydro and wants to keep open the next coal-fired power station that’s otherwise set to close. He’s ready to order gas exporters to break their contracts. And he’s telling power companies to offer more discounts. But even a Clean Energy Target that notionally permits new coal-fired power stations while still subsidising renewables is not going to get base load capacity built. This is where the Liberal and National backbench might need to save the government from itself.

The only way to get our country back on track is to rid ourselves of the emissions obsession that’s produced the wind-power induced blackouts in southern Australia. We need a “jobs first” energy policy that once more builds on our comparative advantage as the world’s near-largest exporter of coal, gas and uranium, as it can’t be wrong for us to exploit the resources that we gladly export to other countries.

No one is against renewable energy, just the $3 billion a year subsidies that give it an unfair advantage and the instability that this preference for wind has injected into our system. Although coal is by far the cheapest energy source, it can’t compete if it has to be switched on and off as the wind blows; and, once it’s closed, there’s nothing there when the wind fails.

Thanks to political interference with normal market forces, wind generators currently get a double bonus: high prices for their power when the wind is blowing, plus extra payments via the renewable energy certificates that power companies have to buy but which consumers pay for. Naturally, the companies want these policy-inflated profits to continue. Of course, they want a Clean Energy Target to expand on the existing Renewable Energy Target so that the subsidies keep coming.

AGL, like Engie before it, is happy to close down old coal-fired power stations so that it can flaunt its green credentials while skimming off even higher profits from its remaining coal assets. When prices go up, energy bosses cry all the way to the bank. But they can hardly be blamed when the system is rigged to favour green ideology over sensible economics.

The government needs to pick a legislative fight with Labor, as well as a rhetorical one. There should be no subsidies for further unreliable wind and solar power. Let’s replace all renewable energy targets with a reliable energy target of 100 per cent so that the power is on all the time.

Even if freezing the RET fails in the Senate, at least it would demonstrate that the government wants to reduce power prices while Labor wants to increase them. If we are to have more renewable power, it must be economic without subsidy or mandate; and the generator must be required to provide back-up power when it fails.

The government also needs to address the political risk that’s stopping power companies from investing in new coal fired power stations. There’s no market failure here, just government failure – as the impending construction of a thousand plus new coal-fired power stations overseas shows. The energy supply, after all, is an essential service. If the government can build Snowy 2.0, it can build Hazelwood 2.0 too; and sell it to the private sector once a normal market has been restored.

As for the Finkel-recommended Clean Energy Target, it simply must be dropped. It would be unconscionable for a government that was elected promising to scrap the carbon tax and to end Labor’s climate change obsessions to go down this path.
The Australian

Tony Abbott claims victory on Coalition’s CET direction
The Australian
Rosie Lewis
21 September 2017

Tony Abbott has claimed victory in influencing the government’s direction on a clean energy target and confirms he will cross the floor if the Coalition attempts to increase subsidies for renewable technologies.

Declaring the backbench would “end up saving the government from itself”, Mr Abbott said the Coalition was “getting the message that we just have to drop any idea of a clean energy target over and above the existing Renewable Energy Target” — which he legislated as prime minister in 2015.

“We have more than enough renewables in the system already and if there were to be an attempt to legislatively increase subsidies for renewables, I couldn’t and won’t support it,” he told Sydney’s 2GB radio. yesterday.

“I’m encouraged that the Prime Minister is talking almost as much about coal, baseload and keeping Liddell open, as he is about pumped hydro. He wasn’t very keen about keeping Hazelwood open when I suggested it back in March but now I think he’s got the message and we’re talking about baseload, we’re talking about coal.”

Liberal MP Craig Kelly said he would “reserve his right” to cross the floor until he saw the detail of the CET and agreed with Mr ­Abbott that taxpayer-funded subsidies to renewable energy sources should not be extended. However, he said a CET mechanism could ensure there was “adequate dispatchable power in the grid”.

The Turnbull government is still to land on a CET more than three months after it was recommended by Chief Scientist Alan Finkel amid deep divisions within the Coalition party room.

Malcolm Turnbull said government MPs were “absolutely of one mind” in ensuring Australians had affordable and reliable energy but refused to comment on Mr Abbott’s latest intervention in energy ­policy.

“Everyone in the Coalition, of which Mr Abbott is a member, are united on ensuring that Australians have affordable and reliable energy,” Mr Turnbull said.

“I’m not going to run a commentary on other people’s remarks. We have a Renewable Energy Target, as you know, which runs out in 2020. It was amended and legislated in 2015, while Tony was prime minister.

“So it’s part of the law … What we are considering … are the arrangements after 2020 to ensure affordable and reliable energy, and, of course, to meet our emissions reduction obligations under the Paris Agreement.”

Deputy Prime Minister Barnaby Joyce said backbenchers were free to do as they liked but urged concerned colleagues to see what the “final plan was” before making decisions.

“Tony Abbott has been prime minister of Australia, which is an incredible honour. His photo is on the wall and forever more in history he would have been as a prime minister of this nation,” Mr Joyce told Sky News.

“I don’t think a former prime minister is going to move to put a Labor government into power. I think that no matter what sort of statement’s been made, they know full well that the best form of government you have is one where people actually understand business are operating the show.”

Nationals MP Andrew Broad said he would wait to see a CET policy before deciding how he would vote.

Bill Shorten said Mr Abbott appeared determined to make Mr Turnbull’s life hell: “Mr Turnbull can’t fix the energy crisis in Australia until he fixes the crisis and division in the Liberal Party.”
The Australian