States go it alone on energy after Coalition buries talk of emissions

State governments have decided – once again – to go it alone on energy after coming to the conclusion that the federal government has no intention of putting in place a co-ordinated national plan on energy and emissions, and will instead continue its ad hoc and chaotic decision making.

A year ago, state ministers on both sides of the political fence insisted that the Coalition had to put together a co-herent nation strategy, one that combined energy and emissions reductions.

But 12 months later, in the first meeting in a year of state and federal governments under the auspices of the COAG energy council, they have appeared to have given up, instead pursuing their own state interests.

Energy minister Angus Taylor – who was blindsided and humiliated by a full scale revolt at last year’s meeting – has quietened the insurgency  through a series of bilateral deals, offering funding support for new generation and transmission project in return for their acquiescence.

The condition is, there is to be no mention or discussion of the second part of his twin portfolio, that of emissions reductions and of actually co-ordinating the two subjects in Taylor’s portfolio.

Most states already have their own mid-term renewable and long term emissions targets in the absence of serious federal policy, and the Climate Council, in its latest assessment of state actions, says they have no choice but to go it alone.

The latest to go that route is NSW, which announced plans on Friday to attract at least 3,000MW of new renewable investment in the first of three renewable energy zones, and effectively knock the head on any idea of building new coal.

NSW will get some funding support for its plan from the federal government. In return, and as suspected by some when federal funding support for the upgraded transmission link to Queensland was announced, state energy minister Matt Kean abandoned the state’s push for a co-ordinated national policy and – unlike his predecessor Don Harwin a year ago – got to say some nice things about Taylor.

“It has been great working with Angus Taylor; he has been exceptional,” Kean said in a statement. Well done, Angus.

Yet the NSW energy security target is an admission that it does not trust federal policy, and its tender for a government contract a reminder that there is no federal policy to drive new investment to replace the coal generators that will soon close.

Remember the Coalition outcry when the then state Labor government in South Australia rolled out its own energy security target. Now, Taylor says: Well done, Matt.

Victoria even earned rare praise from Taylor for its push for tighter energy reliability standards, much to the concern of business groups and others who fear another round of gold-plating and increased costs, and not enough attention to the demand-side of the equation.

But in Victoria’s statement, the true state of national policy was revealed. “We’ll keep pushing for more decisive action – particularly when it comes to a national energy policy beyond 2020 that integrates energy and climate policy,” said state minister Lily d’Ambrosio.

True, some progress was made. Alan Finkel’s national hydrogen strategy was endorsed, and funding allocated (or co-opted) from the remaining ARENA budget and the Clean Energy Finance Corporation.

As Michael Mazengarb writes there is still concern about whether this will end up being a “brown hydrogen” scheme that underpins the fossil fuel industry and carbon capture, or a “green hydrogen” plan that encourages vast arrays of wind and solar.

Like Australia’s overall policy, there was no mention of emissions reduction – either the need or the desire. Instead, this was supposed to be “technology neutral”, which means the federal government is just as keen to make hydrogen out of coal and gas, and try to figure out what to do about emissions later.

While the federal Coalition has abdicated its responsibility to develop a serious long term policy, key institutions are still scrambling to put in place plans and blueprints that can facilitate the clean energy transition that the conservatives refuse to acknowledge.

But there is tension among the key institutions – the Energy Security Board, the Australian Energy Market Operator, the Australian Energy Market Commission and the Energy Security Board – over how this should be done.

One controversial proposal, the COGATI rule changes put forward by the AEMC. Wind and solar developers have warned this could kill investment, while even AEMO has questioned if the proposals are practical. Fortunately, the ministers told AEMC chair John Pierce to go back and consult with stakeholders. Those stakeholders will hope that this time he listens.

AEMO reported on its Integrated System Plan, its 20-year blueprint to manage the transition, but the federal Coalition has refused to acknowledge this in any great detail, apart from cherry picking various projects it has used for individual deal making with the states.

This, however, remains the document to watch with greatest interest. There is growing speculation that it will deliver some spectacular conclusions – both in terms of the life expectancy of Australia’s ageing and increasingly erratic coal fleet, and its vision of what a “step-change” in the make-up of the grid might look like.

Mostly, the states looked after their own business.

South Australia’s Liberal government is already committed to “net 100 per cent renewables” by around 2030, with a growing pipeline of huge wind and solar projects, backed by various forms of storage.

Tasmania’s Liberal government is talking up its pumped hydro and wind resources, which it says can be both the “battery of the nation” and the basis for a clean hydrogen export industry.

Neither state is inclined to rock the boat with the federal Coalition, as they are keen on their own bilateral deals (support for their respective transmission links and storage), but they are talking a completely different language to Taylor.

Dale Wakefield, the minister for energy in the Northern Territory’s Labor government, announced the creation of an Office of Sustainable Energy to coordinate energy policy,  work on electricity market reforms, developing strategies for the target of 50% renewables by 2030, and a “Solar and Renewable Hydrogen investment attraction strategy” for projects such as  Sun Cable’s $20 billion solar and battery project.

“The worldwide transition to cheap, clean, renewable energy presents incredible economic opportunities for the Northern Territory. The Territory Labor Government understands this and is acting now to secure more local jobs in these industries of the future,” Wakefield said.

It will be a while before we hear that sort of language from this federal government.