More Responses to NEG Modelling
The editorial in today’s Australian is critical of the policy approach adopted by the Turnbull government –“under Mr Turnbull the Coalition seems to think all it needs to do is announce elegant policy and await the plaudits” – but (disappointedly) does not advocate considering any change of leadership. By contrast, while agreeing about the need for policy changes, Andrew Bolt rightly argues that any policy changes needs to be preceded by a change in leadership (see OZ Prescribes Tighter Econ Strategy and Bolt says Change Leader Then Policies).
Questioning Continues Regarding Effects on Pricing under NEG
Today’s Australian reports that the views of three groups in the Senate appear to depend on whether and/or by how much the supposed final version of NEG will reduce costs. Pauline Hanson says she is “strongly against” the NEG and wants to pull out of the Paris accord requiring reduced carbon emissions as coal-fired power stations would deliver cheaper power. Senator Leyonhjelm, the Liberal Democrat, said he wanted to see evidence the NEG would dramatically lower power prices before he would back the deal: “they need to fall by at least 50 per cent to restore competitiveness and take pressure off households”. The Centre Alliance’s Rex Patrick said he and Senate colleague Stirling Griff backed the NEG’s goals but their vote would depend on how much the policy brought down power bills: “we would expect on the pricing side for there to be a clear indication of what the savings will be, and that the modelling that generates those savings is released publicly, including all assumptions that were made,” Senator Patrick said (see Some Senate Opposition to NEG).
Some Realities Not Faced Under Proposed NEG
Recipients of my Commentary (who include Environment Minister Frydenberg and PM Turnbull) know that recent Newspolls show only 24% support for reducing carbon emissions by 26% (cf 2005) by 2030 and 48% favour pulling out of the Paris accord (14% Uncommitted). They are also aware that the CEO of the Australian Energy Market Operator has advocated continuing to use existing coal-fired generators for the next 20 years because electricity prices will be lower than using other fuel sources. And that Turnbull has acknowledged this view as correct.
NEG Must Be Abandonned
In previous Commentary I have drawn attention to the apparent strengthening in The Australian’s critique of the Turnbull government’s NEG. Two days ago the paper published a Newspoll showing that only 24% opt for the Turnbull policy of obtaining a 26-28 % reduction in carbon emissions by 2030 rather than keeping energy prices down and that 48% now favour Australia pulling out of Paris. Yesterday it gave publicity to the report by the Australian Energy Market Operator (AEMO) and the CEO’s call ”for Australia’s fleet of coal-fired power plants to be operated for as long as possible to prevent a future price shock in the transition to renewables, claiming the ageing plants will still deliver the cheapest electricity for the next 20 years” (see CEO AEMO). It also referred to Turnbull’s welcoming of the report and his telling to radio 3AW listeners that “there’s no question that getting more megawatt hours out of an existing coal-fired power station is cheaper than the megawatt hours that’d come out of a new one. No question about that at all”.
Energy Policy Becoming Critical
In last Thursday’s Commentary I argued that there are serious problems with the outline of the National Energy Guarantee scheme given by Energy Minister Frydenberg in an article published in The Australian (see Frydenberg on NEG). These included the incorrect claim that the Energy Security Board is independent; the claim that NEG would restore faith in the electricity market when in fact it’s main operative conditions would be stipulated by the government; and the consequent false claim that it would be based on engineering and economics.
Energy Policy
Energy Minister Frydenberg has written an extraordinary article in today’s The Australian (see attached Frydenberg on NEG). It is not practicable to detail here all the problems it reveals with the energy policy apparently adopted by the Turnbull government. But it is based on the National Energy Guarantee scheme already announced by Turnbull and developed by the Energy Security Board (ESB) established by him. Frydenberg claims this is an independent body but its members are so-called “experts” who have unqualified acceptance of the dangerous global warming thesis and who were selected by Turnbull for that reason.
Turnbull A Gonna & High Cost of Energy Policies.
Turnbull is Finished, But…
Today’s media is replite with analyses which, although not actually saying that Turnbull is finished as PM, leave the reader with little else but to conclude that this is the case. Below is a summary of conclusions by several commentators
Qld Election and COAG Meeting Negatives for Turnbull
Although as this is written more than 30% of votes still need to be counted, it now looks almost certain that Labor will be returned and may even have a majority of seats. As the ABC election expert Green says,even if Premier Palaszczuk “falls a seat short, she doesn't have to do any deals. She can leave it to the Parliament to vote her out, because it would be unlikely that all the crossbench would vote against them at once. "It is a fixed-term Parliament — the Government can't just resign and walk out of office and leave someone else to form government — they can't do that, so somebody will form government. "So it is very hard to see how anyone other than Annastacia Palaszczuk can form government in the new Parliament. "They have a certain 46, and they only need one more vote and at the moment we are giving them another two seats on a prediction." (see Labor to Win in Qld Election). Note the failure of One Nation while the Kapper party may get two seats.
In The Right Direction?
The kerfuffle over the ministerial handling of the Australian Federal Police raids on the Australian Workers Union raises serious questions about why the Turnbull government timed such action now and whether Turnbull himself was more closely involved than appears in the media. It followed Turnbull’s decision to announce a new energy policy with important details absent and a promise that these will be “explained” in due course. These “rush” decisions by Turnbull may well be connected with an attempt to lift his continued disastrous polling in Newspoll and prevent any move to replace him before Christmas. Yet an examination of recent developments suggests the polling is now more likely to fall than even stay put.
Energy Policy
Today’s Media has published two damming criticisms of government policy on global warming and, in particular, its predictions that NEG will result in falls in power prices. These come after yesterday morning’s seemingly desperate attempt by Frydenberg to support NEG including by his astonishing recourse to “experts” picked by Turnbull and himself viz “we are absolutely confident that prices will come down because that’s the best advice of the Energy Security Board which represents the best experts in the field … This is no subsidies. No taxes. No trading schemes. No carbon price”. It’s using existing market mechanisms involving “contracts exchanged for physical electricity”. One pertinent comment I received (from a different expert) is that NEG is similar to a plan by Lenin!