Energy common sense... at last!

It has not yet been officially released but the media have already jumped the gun, heralding the new LNP energy policy (see "Power ‘guarantee’ to fix crisis" , "Malcolm Turnbull's new energy policy aims to cut costs and mandate minimum 'reliable' coal, gas production"

Despite the predictable bias in these reports, the policy sounds good to me! I guess it should, since I touted a similar proposition in an my post titled "Baseload Equivalence Test".

Under the plan, energy retailers will be required to buy a minimum amount of baseload power from coal, gas or hydro for every megawatt of renewable energy,  and the RET will not be renewed after its expiry in 2020.

Here is a summary of the state of play (courtesy The Australian ); -

• Energy retailers will be forced to buy a minimum amount of baseload power from coal, gas or hydro for every megawatt of renewable energy
• No taxpayer subsidies for renewable energy from 2020
• No clean energy target
• A reliability guarantee and a separate emissions guarantee that will force retailers to buy a minimum amount of dispatchable power to reliably deliver baseload supply
• A 0.2 per cent reliability regulation on retailers to inoculate the system from blackouts and give a lifeline to coal power.
• Estimated to cut retail energy bills of between $100 and $115 a year.

These sound like sensible measures, nevertheless they will receive widespread condemnation from  climate change advocates and indeed the many vested interests who would very much like to continue their subsidies.

I am sure it will be loud and long! Hopefully the LNP will hold its ground. 

Let the chickens come home to roost!

A rock and a hard place, so the saying goes. It is hard to see a more appropriate aphorism for the position the gov finds itself in the energy debate now raging.  To some extent it is problem of its own making, but completely so. Once a report is commissioned it is incumbent on the government to review and decide which parts it will accept.

It made a mistake by accepting 49 of the 50 recommendations. Leaving the CET out on its own meant it was going to receive increasing pressure to address it.

Yet the pressure is on. All the vested interests smell blood,. The pro renewables commentariat expect that government will be loathe to kibosh the key recommendation of their own report. So even if they compromise and put some coal-including limit on the target they will have won. So they are pushing for a quick decision

My advice to the government is to let the chickens come home to roost. If they can stand the pressure the coming summer with blackouts and  load-shedding will help to form a more objective assessment of the balance between intermittent renewables and base-load necessity. The real energy debate has really only just started, with many anti-RET only now putting their arguments. While the RET advocates are quick to blame the right wing of the LNP, the Nationals, the climate deniers, painting all opposers to renewables as troglodytes, this is not really biting. The electorate is painfully aware of high and rising energy prices and is fearful of load-shedding. Over time these factors will further move public opinion against tokenistic emissions targets. The government has time on its side.

I am sure Frydenberg is scrambling to find a solution that waters down the RET, or CET or whatever name you choose to give it, to what is acceptable to Turnbull. I guess there's the rub. On the one hand Tunbull must still have nightmares about his last energy policy fiasco that saw him sacked, but at the same time pride prevents him from acquiescing to Abbot-esque policies. As for this renaming option, with apologies to the great bard, a CET by any other name would still smell.

My advice to the government is to take their time. There is no reason for a quick decision on the CET. Let the debate continue to fester, let power shortages, black-outs, generate some realism into the energy debate. Energy policy could win the next election