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Energy bosses blast Taylor for having ‘head in the sand’

Energy bosses have given a withering assessment of Angus Taylor’s first speech since being re-appointed as federal energy minister, accusing him of having his ”head in the sand” and taking a dismissive attitude toward bipartisanship on energy policy.

Two coal-fired power generators also poured cold water on the Coalition Government’s feasibility study into a new high-efficiency, low emissions (HELE) coal power station, suggesting it would not be economically competitive.

Mr Taylor told the Australian Energy Week Conference that last month’s federal election win was an endorsement for the Coalition government’s “achievable” approach to emissions reduction and he reiterated his belief that there was no need to revive the National Energy Guarantee policy because its goals had been achieved.

In a snub to critics of the Coalition’s energy policy, Mr Taylor made several references to ”the quiet Australians” that Prime Minister Scott Morrison famously said had delivered his party into power at the May election.

CS Energy chief executive Andrew Bills was one of several energy bosses that sat through Mr Taylor’s presentation in Melbourne, and said Australia would not be getting the clear energy policy it needs in this term of government.

“I thought we heard today one policy announcement which was the QAP; the Quiet Australia policy, which is effectively we don’t need to do anything,” said Mr Bills, whose company supplies about 10 per cent of the National Energy Market’s electricity from coal and hydro power stations in Queensland.

“If you had a caricature you would have your head in the sand when you said that because that is not going to get us there. You could feel it in the room, there was clear disappointment around [Angus Taylor’s suggestion] the national energy guarantee is not needed, we have got the default market offer and the reliability guarantee and nothing else needs to be done because we are going to hit 26 per cent [emissions reduction] without having to provide anything further.”

Mr Bills said Australia needed clear, long term emissions reduction targets and clear long term guidelines around electricity market design.

”For example is the RET [renewable energy target] going to stay as it is? Is it going to be extended? Is it going to be stopped? That in itself would be quite helpful,” he said.

”I think the government needs to address that longer term issue, [but] I don’t think they will, I don’t think you will see anything change before the next election. I think you will see a desire to pick winners.”

Writing in The Australian Financial Review on Wednesday, Mr Taylor said people calling for a bipartisan approach to energy policy in Australia were often “just arguing for a high emissions reduction target”.

Pacific Hydro interim chief executive Rachel Watson said she was concerned by Mr Taylor’s attitude toward bipartisanship on energy policy.

“There is a whole range of different policy mechanisms that could be focused on, but I am always really concerned when I hear dismissive talk, and I think I read it in Minister Taylor’s article in the [Australian Financial Review] this morning, this dismissive view about the value of bipartisanship,” she said.

”Elsewhere in the world energy policy is not a political football, so getting away from that and focusing on just providing really clear long term direction is really the number one, number two and number three priorities as far as we are concerned.”

No certainty

Pacific Hydro has assets in Brazil and Chile, and Ms Watson said those countries had clearer and more stable energy policy than Australia.

“We have not managed to get any kind of certainty around policy generally,” she said.

Mr Taylor said he knew many in the business sector wanted to see an end to partisanship on energy policy, and he said those business people could help “by calling on Labor, both federal and state to accept our targets, the detailed pathway we have outlined to get there”.

Mr Taylor sought to respond to his critics on Wednesday by explaining ”to the last tonne” how Australia would meet the emissions reduction targets agreed at the United Nations Climate Change Convention in Paris in 2015.

Among other things, Mr Taylor’s plan relies on unspecified “technology improvements” and energy efficiency measures.

Mr Taylor said a $2 billion climate solutions fund would deliver carbon abatement needed close the 328 million tonne ”gap” that exists between Australia’s current emissions profile and its Paris target.

“The plan will ensure we meet our climate commitments without sending industries and jobs offshore,” he told the conference on Wednesday.

Cold hard facts

EDL Energy chief executive James Harman said he did not agree with Mr Taylor’s claim that Australia was on track to meet its Paris target.

“Are we on track? I really don’t think we are,” he said.

“Minister Taylor believes so, but if you look at the cold hard facts, emissions of (carbon dioxide) across Australia increased in 2018 versus 2017, so there is work that needs to be done and Australia has its own particular issues around that.

“I think there is going to be significant challenges as this transition from fossil fuels to renewables continues in Australia, it is going to take greater policy certainty, and do we have that at the moment? We have an elected government that has a policy on this but the details of that are yet to be fleshed out.

“Minister Taylor has the climate solutions fund which is a $2 billion pot of money to incentivise abatement across the economy, and that is great. Is it enough? Maybe not, given the rate of change that needs to happen on abatement.”

The Coalition government is conducting a feasibility study into a HELE power station at Collinsville in Queensland.

Delta Electricity chief executive Greg Everett, whose company operates the Vales Point coal fired power station in New South Wales, said he did not think a HELE power station would fit with the Coalition’s goal of reducing power prices to $70 per megawatt by 2021.

“Our assessment of HELE is it is about $90 to $100 per megawatt hour … there is the answer,” he said, when asked if HELE could be competitive in Australia.
”The last place you would probably need it is Queensland, I don’t get that.”

Mr Bills was also not optimistic about the chances of HELE being competitive in Australia’s modern energy market.

“If the business case works, then yes, but I tend to agree with Greg, it has got to stand up on its own merits, and if you are picking winners you are distorting market outcomes,” he said.

Mr Bills said CS Energy owned two of Australia’s most modern coal-fired power stations, and compared to those, HELE technology could only reduce emissions by about 10 per cent.

“If the business case works, then yes, but I tend to agree with Greg, it has got to stand up on its own merits, and if you are picking winners you are distorting market outcomes,” he said.

Source: Financial Review