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Koutsantonis slams NEG, says it is an attack on renewables

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KoutsantonisWeatherillSouth Australia energy minister Tom Koutsantonis has slammed the federal government’s proposed National Energy Guarantee, saying it is nothing more than an attack on renewable energy, and cannot be supported.

“This is of great concern to South Australia,” Koutsantonis said while addressing a conference in Adelaide. “We cannot support the National Energy Guarantee …. And the reason is because at its core, it is an attack on renewable energy.

“The National Energy Guarantee assumes that renewable energy is the problem … it assumes that renewable energy has done harm to the grid and must be stopped somehow.”

“It’s not a National Energy Guarantee at all, it is a guarantee for coal. It is an attempt to subsidise and keep alive coal fired generation in the largest state in country.

“Our fear is that it will do the opposite of lowering prices  …. and entrench monopoly behaviour (of fossil fuel generators).”

Koutsantonis’ comments reflect widespread and growing concerns about the nature of the NEG, it’s failure to address emissions, its modeling that suggests renewables will be stopped in their tracks, it’s likely impact of raising prices rather than lowering them, and entrenching the power of the incumbent generators and their coal assets.

Those concerns have been raised by numerous market analysts and energy experts, and by Professor Ross Garnaut, whose company Zen Energy is proposing up to 1GW of solar and various form of storage to help power the Whyalla steel works and other major industrial users.

South Australia, along with others states, will vote later this month on whether to ask the Energy Security Board to further the pursuit of an ESB.

The states, however, will be presented with modeling that assumes inflated prices for wind and solar, a crippling “cost of capital” that will somehow be eliminated if the policy is in place, and little emissions reductions before 2030 and none afterwards.

Koutsantonis said he despaired of a scheme that offered no penalties for breaking what emissions targets there were, but would likely create priority for “sysnchronous” generation such as coal plants.

“This guarantee …. spells dirty coal. How can any jurisdiction support that?

“It doesn’t meet our needs. It doesn’t meet the Paris agreement … all it is is a nod and a wink to the coal industry. And we can’t support it.”

His comments come as The Guardian reveals, through the so-called Paradise papers, how huge amounts of money were shifted through offshore tax-havens by at least one big coal generator, even as they received handouts from taxpayers to protect them from the carbon price.

Those payments, which amounted to $5.5 billion at the time, shocked many in the industry. The chief lobbyist for this payment was John Pierce, the head of the Australian Energy Markets Commission who is leading the current charge for the NEG to be introduced.

According to the new book “An activist’s life” by former Greens leader Christine Milne, who helped design the carbon price in 2011 (it was in place from 2012 to 2014), it was Pierce who pushed hard for an massive compensation for the coal generators.

“John Pierce argued that massive compensation to coal fired generators in addition to government guaranteed loans was essential,” Milne says.

“He was an advocate for the coal fired generators, pure and simple. The (then Labor) government embraced his advice.”

Pierce and the AEMC have since been criticised – by Garnaut and others – for delaying key reforms such as the 5-minute rule that would encourage battery storage and eliminate much of the gaming on wholesale markets, and for resisting changes that would favour other emerging technologies.  

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  • Chris Fraser

    With those immortal words the National Coal Guarantee has passed into myth … as a cautionary tale.

  • Joe

    Thems fightin’ words from Treasurer Tom and more power to him and Premier Jay. The name…John Pierce…I’ve seen and heard that name before somewhere. Ah, yes he’s the expert, Two Tongues Turnbull hand picked expert on The ESB . I think we all now know what’s going on here. But the silver lining is that The COALition looks to be on borrowed time politically with their citizenship crisis. A this ESB, NEG business will sink together with The COALition.

  • solarguy

    Isn’t there any biological control for these greedy bastards….. these leaches of our great land.

    Perhaps a 50 cal can sort it.

    • Scottman

      Give the bastards 500v DC. That may shock em into real life.

      • solarguy

        Well yeah, but a 50 has a certain ring of victory about it’s report.

    • Hettie

      Certainly there is a biological control. Widespread crop failure when warming reaches 3.5 C, possibly as soon as 2035.
      Trouble is, like so many biological controls, it will knock off all the rest of us too.

      • solarguy

        Good answer Hettie, but damn the last bit.

        • Hettie

          Yes. Just so.

  • Patrick Comerford

    So Turnbulls “expert” turns out to be a Coal lobby mole placed at the highest levels of decision making. The Russians would be proud of this master stroke in counter intelligence. Like any spy who is eventually caught they deserve the traitors fate.

    • solarguy

      Tow em out to sea in barge, sink em and let them be with their own kind for a while, with a bit of blood and tuna oil, for extra company.

  • Farmer Dave

    I would be proud to be a South Australian, and I hope the voters of that State recognise the quality they have in their current Premier and Treasurer. What gets me about the politics of this is that Turnbull proudly talks about “listening to the experts” when referring to John Pierce, but makes no attempt to listen to the expert climate scientists we have in Australia. I’m continually astonished by the free pass all the media, without exception, gives the Coalition on the source of their climate stance. When Tony Abbott returned from speaking at a denialist group in London, for example, where was the media pack demanding to know the names and qualifications of those people whose advice underpinned his speech? Every climate change denying Liberal and National should be asked those questions every time they front the media. It is not good enough to let them get away with their rejection of science in a technological society.

    • solarguy

      Hearing you Dave, there is no science to the vomit they spew.

    • MaxG

      They only listen to the experts who favour their cause.

      • Farmer Dave

        But there aren’t any, Max – climate scientists with solid publication records in the peer-reviewed literature are all convinced by the overwhelming evidence. That’s the point – climate science denial is indefensible scientifically, and those who cling to denial need to be called out and challenged.

        • Leon

          And the only economic argument is to protect the share portfolios and sunk costs of those who’ve invested in fossil fuel generation. That’s what we’re really seeing – economic protectionist policies.
          The security argument carries some weight, but only in the short term while we unleash the investment in renewables that’s crying out to be given its head.

  • PacoBella

    Hand-picking ideological fellow-travellers then positioning them as “independent experts” is the standard operating procedure for the LNP. They have stacked the NAIF Board, all their Royal commissioners, the discredited head of the Australian Building and Construction Commission…. The list goes on and on. John Pierce is just the latest inside job. If they can’t get what they want through the front door (eg as a detailed policy that they announce and run on in an election) they stack the deck and change the rules, all the time pointing in the opposite direction (look at the big spider over there!) and hope nobody notices because the compliant press never question the surreptitious changes and they have the likes of Tony Abbott saying outrageous things to distract attention from their insidious white-anting of democratic institutions and bulk sale of assets and social capital.

    • MaxG

      Spot on!

  • Hettie

    NEG. Neanderthal Egregious Gougers.
    How stupid do they think we are?
    OK, there are many idiots out there who think that celebrity divorces are the only news worth attending to, but there are enough people who are vitally concerned about climate change, who are incensed about power prices, and who are making the effort to inform themselves about the facts.
    In any case, the current Government is surely on borrowed time, and sooner tather than later we should see sanity return.

    • MaxG

      Well, they are counting on the collective stupidity called Australian Voter; it worked last time.

      • Hettie

        True, but Australia has this weird thing about giving a government two terms, no matter how terrible it is.
        Next election that will not be a factor. And it nearly did not work last time.
        I live in hope.

  • Patrick Comerford

    At the SA Smart Energy Summit in Adelaide today Tom Koutsantonis made a very critical statement at the conference that so far I haven’t seen any reporting on. He was emphatic that the SA government “cannot support the implementation of Turnbulls NEG”. As I understand it if there is not unanimous agreement by the states to Turnbulls NEG then it cannot be implemented. Which is great news.

    • Mike Westerman

      Yes SA is key: since the Feds need referral of state powers for the NEM to work (since power is constitutionally a state right), the model legislation was enacted in SA, with all other states using the template. If SA refuses the house of cards collapses. Good on Koutsantonis for showing up the fraud the NEG is. AEMO can then get back to its job of modelling various grid security proposals, and hopefully the ESB will take serious the proposals put up. AEMC needs to be pulled into line, and implement both the 5min rule and AEMO proposals on RoCoF management requirements. A CET like mechanism needs to be formulated consistent as a minimum with our Paris obligations, but it would make more sense for it to meet the most stringent of the state targets.

      Turnbull needs to resign for his unprincipled agreement with conservatives that has brought on the worst episode of mismanagement in recent history, and call an election.

      • wideEyedPupil

        The AEMO share holders are governments and gentailers, vested interests much? AEMC are more of a national joke than ACCC.

  • Gary Rowbottom

    You can’t be anything other than suspicious of a report churned out a month after the ESB was formed, driven by an incumbent biased head, and accepted by the Government after what, a whole day of scrutiny. As compared to the considerably more thorough and diligent review led by our considerably less biased Chief Scientist. I say Mr. Turnbull and Frydenberg, it pongs to high heaven.

  • lin

    Excellent news! Hopefully the other states can show as much backbone in the face of Fizza’s craven capitulation to coal. What a disappointing dud he is, beating such a cowardly retreat from everything he professed to believe in.

  • brucelee
  • brucelee
  • john

    Every week in Qld papers there are full page adds that use figures to show how cheap the HELE is going to be against the high cost of wind and solar.
    The so called graph is headed as 2015.
    I will give link as soon as found.

  • neroden

    Good for him. Hope South Australia can kill this idiotic coal subsidy dead.

  • wideEyedPupil

    A pity Treasurer and Energy Minister of WA Ben Wyatt doesn’t have this kind of bottle. He is new to the job, and portfolio it must be said, but his continued “we’ll wait and see” in the face of what’s effectively climate change denial written as energy policy from the Federal Govt is becoming problematic.

    Also Wyatt’s continued assertion that national mechanisms are (by definition) “more effective and efficient” is nothing more than wishful thinking. How is the NEG (or even the CET before it for that matter) in any way more effective or efficient than ACT going to 100% RE by 2020, or VIC targeting 40% by 2025, or SA holding reverse auctions to go well beyond 50% and provide for better grid resilience and security at the same time? “More effective and efficient” in the absence of any specifics is nothing more than neoliberal mantra repetition, we expect more from a Minister who’s by all reports a fast learner and very intelligent.

  • Alastair Leith

    South Australia, along with others states, will vote later this month on whether to ask the Energy Security Board to further the pursuit of an ESB.

    Is this a typo or can the states veto the formation of ESB itself?

    • Mike Westerman

      All these bodies were established under COAG, which relies on unanimous decisions of the states. In some cases (for example, income tax) where the powers of the states have been referred to the Commonwealth, they can’t withdraw unilaterally. In any case, the threat is always there that the Feds will penalise any state thru funding.