Malcolm turnbull leadership spill

How Turnbull Aims to Fix Labor’s Energy Crisis

Politicians of all stripes like to pick and choose the statistics that back their own policies. But in this case, the stats they chose appear almost fictitious…

Malcom Turnbull has attacked past and present Labor governments, at the state and federal level, for creating renewable energy schemes with little concern for maintaining baseload power. Turnbull declared that the policies were responsible for recent price hikes and blackouts nationwide.

This came after the Australian Competition & Consumer Council released a report recommending that state government should take the costs for their renewable energy schemes through their budgets, rather than the costs being passed onto household bills.

On Monday the Prime Minister said the electricity market was in crisis:

The structure if the Renewable Energy Target imposed a subsidy separate to the price of the energy market. Prices went up but new investments in reliability did not.

Labor ignored reliability and the importance of dispatchable power. And so, price volatility drove outcomes. The system was compromised as investment signals were distorted.

The national RET was legislated by the Rudd government in 2009 and requires 20% of Australia’s electricity to be generated by renewable sources. Similarly, Labor governments in Victoria, South Australia and Queensland legislated their own, more ambitious RET targets, which been blamed for widespread blackouts in South Australia and the early closure of the Hazelwood coal-fired power plant in Victoria’s Latrobe Valley.

Mr Turnbull said the Liberal government’s national energy guarantee (NEG) would be ‘technology neutral’, not favouring any particular type of energy generation. He explained that it would be a mistake to subsidise renewables or coal.

The [NEG] will ensure investment in whatever technology the energy market needs — solar, wind, coal, gas, batteries, pumped hydro and others. It’s not pro-coal or anti-coal, pro-renewables or anti-renewables.

Renewables do not need to be subsidised any longer. The latest long-term contracts are coming in at less than $65 a megawatt hour. It’s below the average market price today.

‘Coal is forecast to remain 60 per cent of our generation mix in 2030. Portraying the future as an either-or is simply wrong.’

Turnbull also criticised Bill Shorten’s target of 50% by 2030, stating that a 50% renewable energy target would repeat the mistakes of the past.

Continuing to force-feed renewables into the market through subsidies guarantees higher prices and less reliable energy.

So the choice is going to be very clear, at the by-elections and indeed, at the general election next year, lower prices under our technology neutral customer ­focused National Energy Guarantee, or higher prices under Labor’s reckless renewable energy subsidies.

Cheap energy goes to the heart of our economic competitiveness. And that’s where the simplistic economics of Labor’s harsh carbon taxes or trading schemes are laid bare. You cannot adjust to the future if you cannot compete now.

With the recent by-elections having failed to result in any decisive swing towards the Liberal party, Turnbull faces the challenge of selling his energy policy to the Australian people. But after our track record of rising prices and blackouts, it’s not likely to be a tough sell.

Leah Wallace

The Australian Tribune Editorial

The Australian Tribune Editorial

The Australian Tribune is an unorthodox news service. Your Australian Tribune editorial team deliver the unfiltered stories that could impact your daily life — political and economic stories you’re unlikely to get anywhere else. And we’re not afraid to step on some toes to do it. We are honest, conservative and never dull. We are an independent service, meaning we don’t answer to shareholders or outside advertisers. This helps avoid conflicts of interest that inhibit mainstream sources, which keeps our voice independent. The Australian Tribune is owned and operated by Port Phillip Publishing.
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