Doomsday: New Energy Minister – Angus Taylor Declares War On Subsidises for Wind & Solar

Angus Taylor’s elevation to Energy Minister is the beginning of the end for subsidised wind and solar in Australia. And the merry mix of zealots and profiteers that people the anti-carbon dioxide industrial complex, surely know it.

As every history buff knows, the French Revolution kicked into gear when an angry mob overran the Bastille on 14 July 1789. But the fun and games didn’t really commence until Maximilian Robespierre launched his Reign of Terror. ‘The Terror’ was clearly a nervous time for those who had fallen out of favour with Robespierre and his revolutionaries. Old certainties and aristocratic manners gave way to the brutal efficiency of the guillotine, and the public squares in Paris were quickly filled with the panicked screams of condemned ‘aristos’ and anyone else deemed to be an apologist for the Bourbon King’s slights and tyrannies.

Sure, things got out of hand and way too bloody, but resentments amongst the peasantry had built up over a very long time, and spirits were high.

Which brings us to the last days of Australia’s subsidy-soaked wind and solar industries.

When the announcement broke last Sunday afternoon that Angus Taylor was Australia’s Energy Minister, STT’s operatives were soon dancing and hollering like drunken Irish hooligans (true, some of them are).

Although, the mood amongst renewable energy zealots and rent seekers was less upbeat. Indeed, some of them suffered reactions akin to anaphylactic shock. Panic set in. Apoplexy followed.

Perhaps it has something to do with Taylor’s well-known views on subsidies for wind and solar?

After Taylor appeared at STT’s wind power fraud rally in June 2013, we nicknamed him ‘The Enforcer’.

Taylor’s speech that day made it clear that he was equipped with the same steady nerve and cool deliberation exhibited by Dirty Harry, as he ‘brightened up’ the mean streets of San Francisco.

In September that year, Taylor entered Federal Parliament as the Member for Hume, and didn’t disappoint: Taylor soon slammed subsidies to wind and solar as “corporate welfare on steroids”. He’s been a forthright opponent of subsidised renewables, ever since. And his hatred of the bitter community division that inevitably follows every wind farm development, is truly visceral.

So, it could be that their fear, panic and loathing is well-justified?

We’ll cross to Judith Sloan, economics editor from The Australian for a little back story.

Re-set gives Coalition space to refresh its energy policy
The Australian
Judith Sloan
28 August 2018

In the week that Malcolm Turnbull stopped being prime minister, you may not have noticed that another man also ceased to occupy a top job. It was Andy Vesey, chief executive of AGL, Australia’s largest electricity company.

There had been rumours of his departure in recent months. He is returning to the US, leaving his company in rude financial health, particularly for a utility, but one that has extremely frayed relations with the federal government.

In 2013-14, the company reported an underlying profit of $562 million. In 2017-18, the figure was $1.023 billion, an increase of 82 per cent in four years.

The dividends have risen from 63c in 2013-14 to $1.17 in 2017-18 and the return on equity has gone from 7.5 per cent to 13 per cent.

This sort of return on equity is extraordinary. It beats the big banks and puts AGL, as a utility, ­almost in a league of its own in world terms. (The other big Australian energy companies are doing very nicely, I should add.)

An obvious response to these figures is, of course, good luck to the company and the shareholders. But here’s the thing — the principal factors that have driven these results are the rise in wholesale price of electricity and the subsidies paid to renewables. The margin on retail customers is a smaller, although significant, part of the story.

For all the marketing guff of the company — “we’re getting out of coal by 2050” and the like — the vast bulk of the company’s profits continue to be sourced from thermal electricity, mainly coal-fired power stations.

Now, one of the main reasons for the difficulties between Vesey and the federal government was the company’s determination to close its Liddell coal-fired power station, located in the NSW Hunter Valley, in 2022.

Vesey was not having a bar ­of keeping the plant continuing, or selling the plant to ­another interested party. The loss of output from Liddell would be made up from other sources, ­according to Vesey.

But this is where the company’s alternative strategy looks a bit dodgy. Bear in mind that the output of Liddell is about 1680 megawatts. Vesey had plans for new generation capacity of only 1215 megawatts and a great deal of this new capacity has not been given the investment go-ahead.

Some of the new generation is pretty small beer, such as the Barker Inlet power station in South Australia, which has a capacity of 210 megawatts. The proposal to ship in liquefied natural gas via Crib Point in Victoria has not been approved and there is strong local opposition. And some of the other parts of the additional capacity are unreliable renewable energy, including a wind farm at Silverton in far western NSW.

At least Vesey was frank enough to acknowledge that the closure of the Hazelwood and Northern coal-fired plants, neither owned by AGL, had resulted in higher wholesale electricity ­prices. At this stage, there are strong reasons to expect a similar outcome from the closure of Liddell.

So how will the federal government proceed in light of the fact the national energy guarantee has been sent off to the policy knackery? And what can we expect from the appointment of the able Angus Taylor to the role of Energy Minister?

The first thing to say is that delinking energy policy and emissions targets is a step in the right direction. The renewable energy sector claims the emissions cut of 26 per cent that is our Paris Agreement commitment will be met by the early 2020s. This is overwhelmingly because of the acceleration of investment in renewable energy, which has been the result of the distorting renewable energy target.

Taylor needs to accept this as a given and concentrate instead on prices and reliability. He also must be firm in signalling to the renewable energy sector that the days of subsidies are coming to an end.

In any case, the sector’s claim that renewable energy is now cheaper than thermal generation means that any ongoing subsidies, including from state and territory governments, cannot be justified.

Taylor’s best bet is to use the ­report of the Australian Competi­tion & Consumer Commission on retail electricity pricing as a guide. Most of the other reports into electricity commissioned by the federal government in the past few years have been inadequate, slanted or otherwise unconvincing: think Alan Finkel and the Energy Security Board, in particular.

Having said this, it is important the government not overegg the message about getting tough with the electricity companies; getting out the big stick and the like. Talk of forced divestment of assets is premature.

While the electricity market has some special features, and bear in mind that electricity is an essential service, there are some ­enduring rules that still prevail. Additional reliable supply will bring down prices across time and competition is important to ensuring this happens as well as securing a good deal for customers.

It is critical that any short-term measures do not work to maintain, or even increase, the market share of the big three gentailers: AGL, Origin and Energy Australia. Smaller players are important, both in terms of restraining the big players as well as injecting innovation into the market.

The two most useful ACCC proposals the government should act on quickly is to firm up proposals for new dispatchable plants with big industrial users as anchor customers, and to insist that retailers provide a default market offer to customers based on a set maximum price.

In the first case, the gentailers would be specifically excluded from participating. Given that there are several live proposals for the minister to consider, this option should be pursued with speed and determination. Making sure the retail part of the market works better for customers, particularly loyal ones, is also a high priority.

Notwithstanding the effort and enthusiasm that former environment and energy minister Josh Frydenberg applied to his role, his achievements were few. Some of the measures he introduced had a distinctly illiberal and anti-market feel to them; for ­example, removing the appeal rights of the transmission companies and poten­tially banning gas exports.

Taylor will bring a new perspective to the energy portfolio, working with market forces and creating incentives that can benefit households and businesses. There is a lot at stake for the ­government.
The Australian

That’s right Scott, the wind and solar industries are going down!

Angus Taylor was sworn in as the new Energy Minister last Tuesday and gave his first speech as Minister on Wednesday. Here’s the Sky News video of that speech (transcript follows).

Minister for Energy Angus Taylor first speech to small business sector
Sky News
Angus Taylor
29 August 2018

Transcript

News Presenter: Thank you. We’re going straight live to Sydney now where the energy minister, Angus Taylor is outlining the details of the government’s new energy policy.

Angus Taylor: My number one priority is very, very simple. It is to reduce power prices and to do this while we keep the lights on.

As you just heard, the Prime Minister Scott Morrison has given me the formal title of Minister for Energy but his informal title is Minister for Reducing Electricity Prices. Now focusing relentlessly on price, while keeping the lights on does require some truth-telling. There will be no ideology in what I do, no grand gestures, one way or another. Just a simple pragmatic focus on the solutions.

This government’s made great strides on energy in recent times but energy policy was in the past bogged down for years in complexity. Complex scheme layered upon complex scheme. These schemes have not been designed with Australian consumers, whether they be household, small or large business and they haven’t been designed with consumers in mind. Other objectives have driven government policy to the point where they’ve lost sight of what we have to do.

The challenge now is to accept that we had a mess and that we’re now fixing it. With only one aim above any other, to reduce prices while keeping the lights on. Now the reason for this focus is to help people, families, small and family businesses to make ends meet, and to help industry create the new jobs in line with jobs that have been created in the last little while. Prices are no longer sustainable for families, for pensioners, for businesses. And when I talk to my constituents and small businesses owners in my electorate, and around the nation, they tell me they want lower electricity bills. Indeed, not only want but need. Many are struggling.

They know instinctively that prices are too high because they remember a time when electricity prices and electricity more generally in this country was abundant and cheap. They know that something has gone terribly wrong. Research by the Australian Energy Market Commission showed that a third of you, small business people, experienced electricity bill shock in the past year, one third. And I know that many small businesses are at breaking point because of rising electricity prices and the job losses and closures are only a matter of time if we don’t get prices down.

Well, we hear you and we hear them. We’re listening, and we’re taking practical action right now. I’ll be bringing all of my experience, my knowledge and capability to get this job done. Prior to my career in politics I worked as a consultant to Australia’s energy, infrastructure and resources sectors and advised global companies on energy policy. For many years, I crunched the numbers and developed energy market models and analysis for businesses of all sizes. I’ve been thinking about energy problems and solutions for a very long time.

Now before I outline the direction of the government, I wish to address four points about what motivates me and the government more generally in this area. First as I’ve said, we need to recognise that sharp increases in electricity prices, particularly retail prices, particularly the doubling we saw out of the previous Labor government, has eroded the trust of Australians in the capacity of government and politicians to deliver affordable, reliable energy. We need to reestablish that trust.

I learned a long time ago in business, that you need to get the basics right. For too long, governments have been distracted by the wrong things. And one of the most basic things any business or household can ask for is affordable, reliable energy. But because of our failure to focus on the basics, the electricity sector like the banks, needs to reestablish its credibility or social licence with the community. That means maintaining and increasing industrial jobs in energy-intensive industries and ensuring households, particularly those doing it toughest, can make ends meet. And we can only do that if we put downward pressure on prices.

Now my second point by way of context is that some in the press in recent days have highlighted my so-called climate change scepticism. I’m not sceptical about climate science, but I am and have been for many years deeply sceptical about the economics of so many of the emissions reductions schemes dreamed up by vested interests, technocrats and politicians around the world. For more than 30 years, I’ve shared concerns about climate change and the impact of CO2 on our climate. I’m a lover of the environment, a farmer, a passionate back country skier and hiker.

My family which is farmed in the Monaro region of southeast and New South Wales for almost two centuries, has continually changed farming practices, particularly in recent years to reflect the changing climate. But none of my concerns justify supporting expensive programmes that deliver little else other than funnelling consumers hard earned money into vested interests, resulting in increased prices and reduced reliability. Whether it was Pink Batts, Cash for Clunkers, The CPRS, Citizens Assemblies, or excessive Renewable Energy Targets, the tendency of governments often aided by willing technocrats has been to conceive programmes that do little more than raise prices and reduce reliability, or increase government spending. In good conscience, I simply can’t support the hard earned wages of Australians and incomes of Australians being syphoned off into these schemes.

Thirdly, I see a strong role for commercially viable renewables alongside a continued focus on coal and gas. Renewables have an important role in the energy landscape as they have had for a long time. For 18 years from 1949 to 1967, my grandfather, William Hudson was the first commissioner and chief engineer of the Snowy Mountains Scheme. Australia’s greatest renewable scheme, a scheme which has single-handedly done more to reduce emissions than any other project in Australian history. He was extremely proud of the clean energy that Snowy provided and provides. Renewables are in my blood and have been from the day I was born. As well as hydro, solar is playing an increasingly important role in our networks and in fact, I personally use Solar technology extensively on the farm where I live near Goulburn.

Finally, if we’re to drive down prices, we need to have laser like focus. Governments, businesses, and individuals are always at their best when they’re focused on a clear goal. As small business people you know better than most, the clear simple, measurable, well-communicated goals work best. As a government, that’s been our experience. When Scott Morrison was immigration minister in 2013, he worked with the then prime minister to set one clear goal for his portfolio, ‘Stop the Boats’. There was no ambiguity for him or anyone else working for him. Few believed it was possible, but he did it. Most commentators wanted more new nuance, more complexity, and more sophistication. But one clear message and one clear goal worked. I wish to give Australians that same clarity.

My goal, the goal of my department, and the goal of the electricity sector must be simple and unambiguous, get prices down while keeping the lights on. Now before I turn to the new direction of the government’s energy policy, let me acknowledge important recent achievements. Because much of what I’ll talk about here today is continuous, is contiguous with what has been happening in recent months. Retail and wholesale prices have turned a corner. They’ve turned a corner because of downward pressure on gas prices through our gas market intervention. Electricity prices are turning a corner because we’re reducing the costs of transmission and distribution by reforming the limited merits review, in line with other sectors in the economy.

And prices are turning a corner because we are holding retailers to account, ensuring they offer their customers a better deal with more transparency. But we need more price-busting initiatives. As a liberal, I’m not a strong believer in heavy-handed government intervention. It would be marvellous if we could fix these problems by leaving industry alone. But unfortunately we’re well past that point. This is the sector now characterised by heavy-handed historical government intervention. Poorly conceived interventions in the past leave us no choice but to make interventions if we’re going to get things back on track quickly. On the other hand, the sooner industry itself steps up and provides the solutions to the problems that I’m outlining, the sooner government can get out of the way.

Now, there are at least three areas of focus for me and for the government if we’re going to achieve this very simple clear goal. It’s not an exhaustive list, but it will give you a sense of where we are, where we’ve been, and where we’re going. As I said, the direction builds on the outstanding work done by my predecessor in the role, Josh Frydenberg, as well as the recent ACCC report, Restoring Electricity, Affordability and Australia’s Competitive Advantage. First, we need to empower consumers, including via a price safety net. One of the most extraordinary and notable developments in so many industries in recent years is the increasing power of customers to hold service providers to account in order to make more informed and better choices. New competitors and business models have emerged, shifting power to customers in industries as diverse as taxis, hotels or retail. These still have better services, better prices, and more informed customers.

It also holds badly behaved service providers to account for charging too much or providing poor service. This has unfortunately not been the case in the electricity sector. We haven’t seen that kind of disruption. We know that many consumers are simply not getting the best available price and retailers are not held to account. If you prepare to switch suppliers each year to get the best market offer, you can find discounts. There’s not doubt about that, and we’ve been supporting that process. With encouragement from the government, more people are doing this. But we really want to put customers in charge. The ACCC recommended establishing a default market price to replace unregulated standing offers. And that will mean customers will not have to shop around each year to get a competitive price and to avoid price hikes.

The expected savings is significant, about 183 to just over the $400 per annum for households and somewhere between $560 and $1,500 for small businesses. So significant numbers and of course, much of that will depend on the energy intensity of the business and the size of the business itself. In addition, we’ll require retailers to use the new default rate as a reference point for all their advertised discounts and will eliminate excessive penalties for late payment. Using price comparison websites and giving consumers more power over their usage and payment data allowing easier switching will help this process. We’ll be establishing a mandatory code of conduct for price comparison websites to focus on consumers, not energy company commissions. I am a firm believer in the power of price comparison websites, of helping consumers and small businesses to make better choices, but we need to make sure what they’re seeing is not being driven by incentives from profit-hungry suppliers.

Now, second, we need more competition and more reliable supply in the electricity market. The ACCC rightly pointed out that each of the individual markets in the national energy market, the NEM, are highly concentrated. A small number of players controlling high market share and far less excess capacity, or spare supply than when the National Electricity Market was first formed many years ago. We’re also struggling as a result of that, with a much tighter balance between supply and demand. As more intermittent generation, unreliable generation has come into the market many baseload generators have left the market. For example, we saw Hazelwood leaving the market in the recent past. We’ve also seen the integration of generators with retailers, something that we saw much less of when the National Electricity Market was first formed. Now, new supply can come from many different sources. It can be expansion of existing generators, upgrades of legacy generators and greenfield projects.

We need to encourage all of these and alongside that we need to encourage the retention of the generating capacity we have in the marketplace already. It’s ironic that in a country with an abundance of natural resources, coal, gas, water, solar, we should be in the position we are today. We have to leverage those resources not leave them in the ground, so we’ll be continuing to encourage dropping state and territory coal and gas moratoria, which have contributed significantly to this problem and to the hike in gas prices that we’ve seen in the recent past. A fair deal for farmer-landowners is also a crucial part of the solution to getting faster access to the resources we need to have new supply in the marketplace. Now, last week, the now prime minister and treasurer announced that we would be implementing a programme to underwrite new stable, low-cost generation for commercial and industrial customers.

We’re currently working through the detail of that programme and that will be done expeditiously. In addition, we’ve accepted ACCC’s recommendation to cap the share of generation in each market. Cap the share of generation in each market. There’s been a lot of talk in recent months about increasing investment certainty for the electricity sector. Frankly, I think there’s some naivety in the idea that governments can largely eliminate uncertainty for businesses or should even try. Parliaments and governments can’t bind future parliaments and governments. They simply can’t do it. This is a breach of the fundamental principle of parliamentary sovereignty. But we can create an environment where there is sufficient confidence and incentive to invest. Reestablishing the confidence to invest will be a central goal of any energy market reforms.

Thirdly, price gouging needs to stop. Price gouging by distribution and transmission businesses has been a result of over-engineering and over-investment in the networks and being given a regulated rate of return on their investments, and what a business this is. Convince the regulator that you need to invest and your returns are guaranteed. Most hardworking small business people would weep at the way this works. Small business and people never get these sorts of guarantees. All of that is paid for by the electricity consumers in the marketplace and it’s unacceptable. The regulatory process needed to change and it’s changing with our reforms to the limited merits review. In practise, what this means is it’s much harder for distribution and transmission businesses to over-engineer and overinvest with the guaranteed return. At the wholesale generation level, there’s enormous potential for strategic pricing in the marketplace or price gouging in the vernacular.

in any industry, if market share consolidates, it’s easier to hold back capacity from the market and drive up prices. In a very dynamic market like electricity, this is always tempting. When demand is strong and supply short, holding back capacity can have a massive upward impact on prices both in the short term for strategic bidding and in the longterm by permanently reducing supply in a particular market. So the ACCC proposed a number of changes to address this, which the government accepts. And they include directing the ACCC to hold an ongoing inquiry into prices, profits and margins in the NEM, right through until 2025 with reports at least six-monthly to inform us as to whether those margins are reasonable and whether this kind of behaviour is going on.

Establishing greater transparency in the wholesale market with enhanced powers around market manipulation and intervening if businesses don’t respond to the ACCC recommendations including by fines, penalties, and if necessary, divestment. Now while ACCC didn’t recommend divestment, we’re prepared to go down that path albeit as a last resort. The better answer is that the industry works with us to get wholesale electricity prices down, but the loss of trust and the failure to deliver acceptable outcomes has reached the point where the government has no choice but to wield a big stick, which we will use if we have to. Now, in my view, the alternatives to all of this are unacceptable. Our policy in this area is sharply differentiated from Labor and we make no apology for that. Prices doubled during the tenure of the previous Federal Labor government and Jay Weatherill’s experiment in South Australia with a 50% renewable energy target ended in tears. Not crocodile tears, floods of tears.

So what does Federal Labor propose? It wants to take Weatherill’s failed experiment national. The difference between us and them could not be more stark. Labor’s platform puts climate change at the centre of the broader economic strategy, but as the prime minister has said, this government is instead focused on delivering for all Australians and that means reducing electricity prices and cost of living pressures. In contrast Labor prioritises the 45% Paris emissions reductions target above all else, at the expense of lower bills and reliability.

They will force the closure of coal-fired power plants with no plan for energy security and comparable EIS modelling tells us that this will result in significant price hikes. They have proposed damaging bans and moratoria on gas exploration, putting further upward pressure on prices as gas shortages and price hikes feed in to electricity prices. Their focus is on batting away Green party threats to inner-city urban MPs. Not on developing evidence-based policy that will lower bills. I think those policies will leave Australian households and businesses out of pocket and in the dark. While a third of small business feels that the market isn’t working in their interest, the Labor Party has publicly stated that high prices are not a market failure, they are proof that the market is doing well. We simply reject that.

Now this government understands that small business is the backbone of the economy, as I said. We’ll continue to back small business to help them get ahead. Practical action on energy prices is just one of the ways we will continue to strive to deliver for you. Our new generation government heralds a new generation of energy policy. Energy policy where we sit on the customer’s side of the table without other distractions. I’m acutely conscious of the energy industry more than most, has many stakeholders with many different views and interests and that consultation is crucial to getting alignment and solutions. But the simple truth is that if the industry steps up and does the right thing on price and keeping the lights on, government can step back and focus on other things.

We’re not at that point yet, and through the initiatives I’ve outlined and others we’ll be seeking strong alignment across the electricity industry with the interests of customers coming first. My personal focus, the prime minister’s focus and this government’s focus will be single-minded. Getting those prices down. The time has come for telling the truth and the new relentless focus on the Australian consumer will be the core of that focus. We make no apology for that. Thank you.
Sky News

Australia’s energy crisis finally gets a safe pair of hands.

Many an untrained eye might suspect that it’s business as usual for renewable energy rent seekers in this country. However, there are a few giveaways that show Australia’s new Energy Minister thinks otherwise.

Yes, he spends a fair bit of time talking about his grandfather and the Snowy Hydro scheme, and makes a passing mention of solar being used on his grazing property at Goulburn (we presume the panels power submersible pumps or electric livestock fences).

But he never once mentions “wind”. Instead, Taylor attacks “intermittent” and “unreliable” renewables (ie wind and solar); launches a broadside on excessive Renewable Energy Targets; and slams the massive subsidies directed to renewables for distorting the power market, making electricity unaffordable for far too many Australians.

Taylor’s reference to “commercially viable renewables”, is an oxymoron (like ‘fresh-frozen’ or ‘Facebook privacy’): Taylor knows full-well that there is no such thing. By this point in his speech, Taylor is clearly toying with his victims.

Government mandates, targets, subsidies and penalties aren’t features associated with any truly “commercially viable” business. They are, however, the only reason that the wind and solar industries exist.

Taylor’s speech prompted the usual suspects to drone on about the need for “certainty” and how the world would end without their particular brand of “certainty”.

STT suspects that Taylor will provide ‘certainty’, but not the certainty that the rent seeking class so desperately demand.

Taylor makes it very clear that his brief is to reduce power prices. That objective is wholly inconsistent with the kind of ‘certainty’ that’s bound up in $60 billion worth of subsidies to wind and solar, mandated under Federal government legislation.

It’s also pretty clear that Taylor is going to take the side of power consumers, rather than the profiteers who have, so far, benefited from the greatest wealth transfer in Commonwealth history.

After ditching the wind and solar obsessed Malcolm Turnbull in a bitter leadership struggle – brought on by the wind and solar industry’s efforts to introduce the National Energy Guarantee (designed to be a perpetual RET on steroids) – the Liberal/National Coalition only has six months (or less) to convince voters that it’s got the policies needed to slash power prices and keep the lights on. On that score, the buck stops with Angus Taylor.

Here’s Judith Sloan laying out the path that Taylor is most likely to take.

No magic wand as Angus Taylor tries to ensure price is right
The Australian
Judith Sloan
31 August 2018

New Energy Minister Angus Taylor has spent a lot of time thinking about energy policy.

His professional background is directly relevant, having consulted for energy and resource companies.

In terms of the sole KPI that Scott Morrison has set him — to reduce electricity prices — he is determined but measured. He is rightly sceptical of all the high-falutin schemes that governments dream up and which companies then game at the expense of consumers. He is prepared to threaten the big stick but hopes that the energy companies come on board to achieve better outcomes for households and businesses.

Now that the tortuous national energy guarantee is dead, he can speak the truth about the myth of investor certainty in terms of driving better outcomes. It is the role of companies to invest under conditions of uncertainty and to manage risks as they arise.

It was untrue that the NEG was technology-agnostic — one of the assertions of Malcolm Turnbull — because the need to cut emissions was a binding constraint. The Paris commitment, non-binding by the way, has now been placed in the deep freeze — after all, the renewable energy sector tells us the target will be met by the early 2020s in any case — and the emphasis is squarely on prices and reliability.

There is a variety of ways that lower prices can be achieved. One way is to insist that retailers offer a low-price default option, with the price set by the regulator, in place of the high-price standing offers that are so detrimental to loyal customers.

Another way is to ensure that the life of legacy assets — think the Liddell power plant — can be extended and upgraded. Investment in new, dispatchable power plants will also need to be part of the mix. There are several proposals being worked up; it will be a high priority for the minister to work with the proponents.

Sadly, there is no magic wand that the minister can wave and quickly eliminate the layers of problems in the electricity sector. It has taken years for this mess to build up.

There are things that can be done in the short term, but it would be helpful for Taylor to lay the groundwork for some longer-term solutions.

The presence of substantial renewable energy in the system is a given. The challenge is to insist that wind and solar farms offer 24/7 electricity through partnering arrangements, rather than being unwittingly propped up by fossil-fuel generators whose economics have been undermined by the highly distorting renewable energy target.

The reliability requirement should be placed on the generators rather than the retailers, which lately was the case under the NEG. The dispatch preference given to renewable energy in the National Electricity Market should also be reconsidered.

It’s time for a truly level playing field in which the subsidies for renewable energy are phased out as quickly as possible. No one could object to that.
The Australian