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).
“Final” Version of NEG But Coal Still Favoured by Many
The Australian reports that the “final” version of NEG has now been sent to the states from where they will soon be leaked (see NEG “Finalised”). This version is to be considered at COAG next month and it appears that it does not include the mechanism for setting the emission reduction target, which are (amazingly) to be set each year under federal legislation. The responsibility for meeting the so-called “reliability obligation” is unclear as to what variation in supply, and from what fuel source, would be “unreliable”. No mention is made in this report of what is expected to happen to electricity prices.
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”.
What is the NEG Policy Now?
The editorial in today’s Australian contains an important follow-up to yesterday’s 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, which is up 3 percentage points (see OZ Favours Coal Instead of NEG). It also draws attention to the report by the Australian Energy Market Operator (AEMO) and its 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”.
Frydenberg Gets Help with NEG O’Seas
Today’s AFR reports it had an exclusive interview with the executive director of the International Energy Agency, Faith Birol, about the Turnbull/Frydenberg NEG policy (I have highlighted the major points made). This appears to follow Frydenberg’s private meeting with Birol purporting to explain NEG and a speech to diplomats and energy policy makers at IEA’s Paris HQ. He also claims to have briefed “key” Trump officials and chairs of US energy committees in Washington.
ACCC Report on Electricity Prices
The ACCC report on electricity prices, and the associated address by Turnbull at the Queensland Press Club, were not available on either’s webites at the time of writing this at 9.00pm and after. However copies of the report were available to the media, which also had an oral version of Turnbull’s 15 minute to the Press Club. These articles from The Australian include references to what appear to be the main points or the main emissions made orally by both Turnbull and Sims. It appears that the prices issue will again be a major item tomorrow in The Australian.
Polling and Electricity Prices
Today we have been “flooded” by opinion polls which, while not showing any overall deterioration in the Turnbull Coalition’s polling, confirm its continued inability to effect any significant improvement in that polling. The state by state Newspoll for the February-March quarter also suggests there is a continued problem in Queensland, where the One Nation vote is much higher than in other states and has increased significantly since the 2016 election result (from 5.5 to 13 percent in the February- March quarter).
More Questioning of Turnbull Energy Policy
The public address on 3 July by Tony Abbott advocating withdrawal from the Paris agreement has produced favourable reactions from several quarters but a response from Turnbull and some of his ministers which is largely dismissive and an attempt by much of the media to suggest Abbott’s analysis is outdated and should be ignored. That is what might be expected from people who have locked themselves into a fixed position that we face dangerous warming unless carbon emissions are reduced. My commentary below concentrates on those who have challenged that position.