The Morrison government is set for a fight from within over proposed changes to the Clean Energy Finance Corporation, with a growing number of Nationals looking to lift restrictions on investments in unproven fossil fuel technologies and nuclear energy projects.
Federal energy and emissions reduction minister Angus Taylor has introduced legislation to establish a new $1 billion Grid Reliability Fund to be administered by the Clean Energy Finance Corporation, that the government wants to use to underwrite new gas and storage projects, which would require re-defining gas as a ‘low emissions technology’.
The Clean Energy Finance Corporation is restricted to only investing in ‘low emissions technologies’, and is explicitly prohibited from investing in nuclear energy technologies and carbon capture and storage projects.
The federal Labor opposition and most of the crossbench has already their opposition to the changed definition of what constitutes a ‘low emissions’ project – as well as new powers to be granted to the federal energy minister to direct the way in which the CEFC can make its investments.
However, a group of Nationals senators want to go a step further and are seeking to hijack the government legislation by moving their own amendments to lift the restrictions on nuclear, coal and carbon capture and storage investments in an effort to direct public funds into a number of expensive and unproven energy technologies.
The Nationals amendments would see the CEFC, which has established a successful track record of generating positive investment returns on behalf of the government while investing in emerging clean energy technologies, opened up to make investments in nuclear energy projects, one of the most expensive sources of new electricity generation, and unproven carbon capture and storage projects.
According to The Australian, some 48 out of 71 Coalition backbenchers support nuclear, and only one opposes. The other 22 haven’t said.
The most recent assessment of the cost of new sources of electricity generation undertaken by the CSIRO ranked nuclear power as the most expensive technology and noted that there was a substantial level of uncertainty around the costs of nuclear as a plant has never been constructed in Australia.
Australia has just one operational carbon capture and storage project, at the Gorgon LNG facility in Western Australia, which has faced a series of delays and ongoing operational issues that have seen the project underdelivered on its projected volume of stored emissions.
The rebel group includes former deputy nationals leader Bridget McKenzie and former resources minister Matt Canavan and could see the Nationals senators break away from the Morrison government in the senate over the issue of support for fossil fuels.
The group also includes Nationals senators Susan McDonald, Sam McMahon and Perin Davey and is understood to be courting support from Liberals backbenchers Gerard Rennick, Andrew Laming and John Alexander.
The group argues that all technologies capable of reducing emissions should be available for investment in Australia – however the same group of senators has also advocated for the construction of new coal fired power stations and lobbied against new investment in renewable energy technologies.
The move follows an attempt by former Nationals leader Barnaby Joyce to move his own lower house amendment to allow the CEFC to make investments in new coal fired power stations.
As reported on Wednesday, the amendments being proposed by Barnaby Joyce are unlikely to even achieve their intended end, as they have been drafted to set an emissions intensity threshold that would be too low to enable the Clean Energy Finance Corporation to make any investments in new coal fired generators.
It is unclear whether the planned Nationals amendments will be adopted by the wider Liberal-National caucus, however, Treasurer Josh Frydenberg has already indicated that he will not support the amendments proposed by Barnaby Joyce.
The plan has been met with swift opposition from Queensland minister for energy, renewables and hydrogen, Mick de Brenni, who said a nuclear power plant would not be welcome in Queensland.
“Queenslanders have emphatically rejected nuclear power time and time again and today’s revelation flies in the face of every State and Territory’s nuclear ban,” de Brenni said.
“Queensland’s renewable energy zones have been flooded with enough interest to create 60,000 megawatts of extra clean energy, which could create up to 57,000 jobs in construction alone, let alone the influx of load intensive manufacturing jobs.”
“What regional Queensland needs is an Australian government that is united on growing manufacturing and delivering cleaner, cheaper, energy. Not a Government that is tearing itself apart and proposing antiquated solutions,” de Brenni added.
The Australian Conservation Foundation questioned the strategy being pursued by the group of Nationals backbenchers, as they would compromise the integrity and performance of a popular and profitable government entity.
“Undermining the popular and successful Clean Energy Finance Corporation would be a massive own goal,” ACF campaigner Dave Sweeney said.
“Talking up nuclear and new coal-fired power plants is a dangerous distraction from facing up to Australia’s very real energy challenges and choices. There is no such thing as clean coal and the CEFC wouldn’t be considered a trusted investment partner if it was expected to invest in this outdated, dirty technology.”
“When it comes to climate action, nuclear power is a dead end. The reactors that exist are expensive and risky; the promised new reactors don’t exist. Nuclear is not a credible climate response and has been repeatedly rejected by the market and the community,” Sweeney added.
Federal energy and emissions reduction minister Angus Taylor has been contacted for comment.