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Live: Turnbull unveils new energy plan – national energy guarantee

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We will be filing live on the announcement of the Coalition government’s new energy plan. A press conference is expected at 1.15pm AEDT.

The government has already flagged that the proposed Clean Energy Target will be scrapped, in favour of a “national energy guarantee”, which will require retailers to contract a certain amount of “baseload” capacity, and a certain ratio to meet emissions targets.

Butler says it is clear that the Coalition government is “hell-bent” on destroying renewable energy – which under the modelling will account for just 28-36 per cent by 2030. If that’s true, we’d be interested to know what the Coalition proposes in its place.

12.30AEDT: Turnbull has put this on his Facebook page … claiming a “significant breakthrough” that was “truly technology neutral.”

He says the Energy Security Board has recommended the plan, which is bit strange since they only met for the first time a few weeks ago.

Instead, it appears to have come directly from the Australian Energy Market Commission, although it may have gotten some endorsement from the ESB, which does not take into account emissions targets.

From Turnbull’s Facebook page:

“I want to tell you – first – that today I am announcing a national energy guarantee that will deliver affordable and reliable electricity for you and your family.

The Guarantee is made up of two parts:

A reliability guarantee to ensure that energy is always available
An emissions guarantee to contribute to Australia’s international commitments

The Guarantee builds on our existing energy policy including:

ensuring energy retailers offer consumers a better deal
delivering more gas for Australians before it’s shipped offshore and
building Snowy 2.0 to stabilise the system
stopping network companies gaming the system

Together, our energy policies, including the guarantee, will cut the average household energy bill.

Greens leader Richard di Natale said: “Alan Finkel has been comprehensively shafted. This represents the complete capitulation of Malcolm Turnbull’s leadership.”

“One the one hand you have Abbott wanting to throw goats into volcanoes. On the other, you have Malcolm Turnbull trying to put lipstick on a pig.”

12.0AEDT: John Grimes, from the Australian Solar Council, told the ABC the new policy was “dumb, in terms of economics and dumb in terms of science.”

The ABC asks: “Is this policy better than nothing?”

Grimes: “absolutely not. this perpetuates uncertainty. It puts sand in the saddle bags of the renewable energy sector.”

12.43AEDT: Former CEFC CEO Oliver Yates, ABC TV interview: “The policy… as it stands… appears to be far too low in its ambitions in relation to the climate change target, it takes no consideration of Australia’s national carbon budget.

“The way that this policy is currently framed, it appears that what the government are doing is that they’re trying to limit the electricity sector’s obligation to reduce emissions to a smaller percentage than what is economically sensible.

“Everybody knows that the sector that can make the best and cheapest form of reduction in carbon emissions …. is the electricity sector.

“So instead of actually reducing emissions in the sector which can do it (cheaply) for consumers, they’re going to require other sectors of the economy to suddenly start making significant carbon reductions at a higher economic cost than the electricity sector would do it.

“So there is a real question of whether we’re robbing Peter to pay Paul here and just shifting our carbon emissions to another sector which will actually be more expensive for the economy.”

12.45AEDT: RenewEconomy has been making some calls, and struggling to find details. Turns out that the level of the reliability options and the portfolio guarantees have not been decided.

What is intriguing is that this appears to be a recommendation from the Energy Security Board, which according to its chairperson Kerry Schott only met for the first time in September. They must have been busy.

She said then that harnessing demand management in Australia, means “we can all stop worrying about building new plants of any description.” Hmmm.

12.55AEDT: Coalition MP says that the mechanism will force energy retailers “to buy coal, gas, for every megawatt-hour of renewable energy they purchase.”

This is exactly what Reneweconomy warned when Frydenberg was trying to sell Finkel to the Coalition party room, and which he so vociferously denied in subsequent calls to RE. But there we go.

13.20AEDT: (Press conference begins)

13.30AEDT: Malcolm Turnbull: “This is part of a comprehensive plan to ensure that energy is affordable, reliable and responsible. …Why is (this energy plan) so much more affordable? It provides investor certainty, which the market has been crying out for.

13.35AEDT: Federal energy minister Josh Frydneberg: “This is a credible, workable, pro-market policy that delivers lower electricity prices. It means no subsidies, no taxes, no trading systems.

“And what it does do is it creates a more reliable, affordable energy system that helps us meet our international climate commitments. … It builds on the excellent work of … Alan Finkel. This is a response to his 50th (recommendation) which was a Clean Energy Target.”

13.38: Energy Security Board chair Dr Kerry Schott says “most importantly, the obligation to have a reliable power system is now intimately linked with an emissions reduction target. If you don’t have those two things linked together, you have a danger of an increase in intermittent renewables, without having reliable and dispatchable power to go with it.

“The other thing that we have recommended… is that the reliability standard… is basically dictated by physics. …So we set a reliability standard across the market, and then that gets translated into original standard, which is effectively state by state.”

13.40AEDT: Turnbull says “the mechanism” will be reviewed annually, to factor in any changes in energy market that have not been taken into account.

13.46AEDT: Reporter asks PM if renewables can stand on their own to feet, without subsidies. His response…

MT: “The answer is yes. This is one of the important things to recognise… They are now competitive with new builds of thermal power. There is no need for a subsidy. They can compete on a level playing field.”

(RE notes further comments on this subject made by Oliver Yates earlier: “The RET is not a subsidy, it is an obligation just like what the government is proposing here. That is what you’re calling a subsidy. “When the government turns it on its head and says, well, now I’m going to require electricity users and electricity retailers to have a certain percentage of dispatchable power. They’re claiming that is not a subsidy. …It was never a subsidy … there was an obligation to have a certain energy mix. Now what the government is saying here, is rather than say they want to have a mix of renewable energy, what they’re saying is actually, they’re requiring an energy mix … of what they call dispatchable energy, which, obviously will be what they talk about as being coal and gas.”)

On the future of the RET…

Frydenberg: The point about the RET is it didn’t account for, one, the geogrpahical focus of a lot of that build, which went to SA, and it didn’t account for the need for storage and back-up.

Audrey Zibelman says what AEMO likes about this mechanism is “it actually signals what the system needs, which is that we need a portfolio of resources that meet all of the objectives of policy.”

Reporter asks what the mix of intermittent renewables might look like in 2030 in order to meet emissions targets …

Frydenberg: The advice by the AEMC, the early analysis is, that (by 2030) renewables will be around 28-36 per cent, and of that, the intermittency, which is the wind and solar, will be around 18-24 per cent. This is a very important point. Not all renewables are the same. Hydro power is baseload power, it’s dispatchable power. Wind and solar need battery storage or pumped hydro in order to have that level of dispatchability. This is extremely important to understand…”

Reporter notes that if one-third of Australia’s emissions reduction task will be done by the electricity sector, under this plan, that leaves two-thirds of the job ahead needing to be picked up by other sectors. Asks who’s going to be doing the heavy lifting?

Josh Frydenberg says he wants to point out “it is often an inconvenient truth that Australia has its lowest emissions intensity on a per capita and GDP basis in 27 years…”

Reporter: “But there is still two-thirds of the job to go…”

Frydenberg: “I would think about the positive of this announcement today, rather than any other challenges in other sectors which will be for another press conference.”

PM on electricity bill savings under this plan.

“This is reducing the cost burden on Australian families and businesses from high energy costs… (it) involves a number of measures….” handballs the question to AER’s Paula Conboy…

Conboy: “Going forward, we’re improving the tools that we use in terms of making sure that it’s only the efficient costs that are being passed through to consumers. We’re undertaking a review of the rate of return that the networks can earn on their asset bases. And also ensuring that when they’re looking at needs on their systems, that they’re not only looking at network needs, but they’re also looking at non-network alternatives, to ensure that … only efficient costs are being passed on to consumers.”

AEMC’s John Pierce: “The effect that we would expect from this (policy) compared to what they have now, where we have prices higher than they need to be because of the policy uncertainty, will be a reduction in uncertainty, triggering investment, expanding supply, and lowering prices. …We also suspect that because there are no certificates, and we’re using contracts, that will also reduce prices and improve the ability of new entrants to come into the market, and improve competition.”

13.58AEDT: Press conference ends as PM says “Question Time calls!”

15.15AEDT: ABC reports South Australia premier Jay Weatherill response to federal energy policy announcement:

Weatherill: “This is a complete victory for the coal industry. Malcolm Turnbull has demonstrated his complete inability to stand up to vested interests and stand for public interest.”

(This story will be continuously updated).  

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  • George Darroch

    What a NEGative plan.

  • David leitch

    Certainly a controlled release of the info to give govt time to get its messages across before the scrutiny begins. The interesting idea is to get it done via coal rather than the Senate. I guess will require changes to the national electricity rules

    • Joe

      It took less than a day and under plenty of scrutiny there are more questions than answers. An 8 page information release, no modelling released, a $’s savings number plucked out of the air and no guarantee of anything. COAG will be interesting as Premier Dan and Premier Jay have come out hard against the Turnbull’s of…Tony Abbott’s energy policy….ha, ha, ha. The COALition wants Labor’s support, good luck with that. The COALition is reaping what they have sown over the past 10 years with the Climate War and the Energy War which were instigated by The COALition for opportunistic political reasons.

  • RobertO

    I watch the TV version and there was nothing positive in it at all. How to mislead the public is a better statement, very much do not answer any question. Slimey come to mind. Craig Kelly was better on TV and appears better and more truthful. Yes he is happy that this will limit RE to 26-28 % (but that not what we need in Australia and nor is it what the rest of the world appears to be doing). The COAL:ition will lie and cheat to keep power in this country!

    • Joe

      “Craig Kelly ….more truthful”…you have to be taking the piss. Have you not heard the rubbish that he has been spouting. The dude has no credibility fullstop.

      • RobertO

        hi Joe, I said “appears better and more truthful” ! Compared to the weasels TurncoaT and his offset burger rings. Please note that -50 is always better than -85 (and the sooner they all leave the better Australia will become)

        • Joe

          Sorry that I did not fully understand your comment. Whenever I see Craig Kelly’s name appear it gets me sort of…’unhinged’.

  • DevMac

    “Wind and solar need battery storage or pumped hydro in order to have that level of dispatchability. This is extremely important to understand…”

    Is this provably incorrect? Didn’t South Australia have something like 50% of its power generated from solar and wind for 2016? Doesn’t this mean that, like the term “baseload”, “dispatchable” is related, but not core, to sufficient power generation?

    If “dispatchable” has some degree of guarantee to it, variable power sources like wind and solar are excluded, meaning it’s a bit of a loaded term.

    • Chris Fraser

      Theirs is an artificial differentiation. Wind and solar stored in a battery is perfectly dispatchable.

    • Mike Shackleton

      The term baseload has been bastardised and corrupted for political purposes. Baseload is meant to mean the minimum demand on a network in a 24 hour period. Old coal systems were capable of meeting this demand as you could fire up the appropriate number of units required to meet it and run them flat out, with hydro/gas absorbing the peaks and variability. With wind and solar, we need smart systems that can fill the gap between renewable supply and demand, assets that can sit idle for hours and spring into action at a moments notice. Batteries, traditional hydro, pumped hydro and some gas units can fill that gap.

  • Chris Fraser

    If hydro, and pumped hydro, is part of the dispatchables (the technologies on the list was their list, not mine), would you think this is going to encourage investment in Basslink 2.0 ?

  • Rod

    Negging
    Negging is an act of emotional manipulation whereby a person makes a deliberate
    backhanded compliment or otherwise flirtatious remark to another person
    to undermine their confidence and increase their need of the
    manipulator’s approval. Although some believe that it builds attraction,
    it results in poor quality relationships.

    Has our Prime Ditherer just negged me…..

  • Chris Drongers

    Does ‘dispatchable’ require 90 days of fuel on hand as Perry is trying to get through in the USA? Only coal/gas/oil, Tasmania and Snowy 1 would be able to make this standard.
    Or should generator dispatchability be held to the same limits as Australia’s liquid fuel backup – currently about 60 days?
    Or is disapatchibility to run over the length of a large high/low weather system transit (about 7-10 days) to allow for the maximum periods over which the wind don’t blow and the sun hides behind clouds
    Or is dispatchibility for a wholesale bidding period (5 mins or 30 mins)
    Will generators that fail to bid be considered to have failed their dispatchibility requirement
    Will generators that blow a fuse/steam pipe/overheat the wastewater ponds be considered to have failed

    The policy seems to be largely a thought bubble.