Taylor finally calls COAG meeting, but will he face up to clean energy future?

Federal energy minister Angus Taylor has finally written to state and territory energy ministers to convene what will likely be the first and only face-to-face meeting of the COAG Energy Council in 2019, inviting ministers to meet on 22 November in Perth.

COAG Energy Council has been the primary forum for the development of national energy policy and had been worked particularly hard under Taylor’s predecessor as energy minister, Josh Frydenberg, including work on the National Energy Guarantee.

But in the one and only meeting held by Taylor since his appointment a year ago, the federal minister was harangued by even the Coalition state ministers over his lack of action. Will that change this time round? The energy industry is keen to know because there is a lot at stake.

Even without a coherent federal emissions reduction target, or long term energy vision, there is much work to do, and the Integrated System Plan, the 20-year planning blueprint being put together by the Australian Energy Market Operator, is top of most state ministers’ list of things to do.

All state ministers – with the exception of NSW – have emissions and renewables targets well beyond that contemplated by the federal Coalition, and are key that the necessary institutional and regulatory reforms are done to make this transition easier. Even NSW has a zero carbon target for 2050, something that federal Coalition scrapped along with the carbon price in 2014.

In a letter seen by RenewEconomy, Victorian energy minister Lily D’Ambrosio wrote to Angus Taylor earlier in September demanding the federal minister immediately convene the COAG Energy Council to deal with the growing list of outstanding business in front of the council.

D’Ambrosio cited implementation of the ISP – a key to unlocking the infrastructure necessary for her own state’s 50 per cent renewable energy target – along with reforms to the reliability standard, the Australian Energy Market agreement and a review of the Energy Security Board as key issues.

The Victorian minister also wants the COAG Energy Council to continue working towards the integration of carbon and energy policy, including the need for all jurisdictions to agree on a consistent national trajectory for emissions reduction.

“I write to you requesting that you immediately call a meeting of the COAG Energy Council to consider issues of national significance regarding the operation of energy markets, system reliability and the rapid integration of utility-scale and distributed renewable energy,” D’Ambrosio wrote.

“The Victorian community expects its governments to work together to provide leadership and certainty in a sector that is rapidly changing and to ensure that our energy system is serving the long-term interest of consumers.”

These are views that have been echoed by energy ministers in other jurisdictions who have stepped in to provide leadership on energy policy and emissions reduction.

The last two weeks have seen both South Australia and the ACT outline visions for transitioning broad parts of their economy to cleaner energy sources, including South Australia’s plan for a 100 per cent renewable hydrogen economy. The ACT will reach its 100 per cent electricity target nest month and is now moving to decarbonise transport and buildings.

Victoria’s d’Ambrosio is angry at both the lack of meetings, and Taylor recently taking credit for the emissions reduction achieved to date despite his lack of policy.

“It’s Victoria that is providing the ongoing certainty businesses need to invest in future energy projects through our legislated 50 percent renewable energy target,” she told RenewEconomy.

“I’ve said ll along the energy council must make the decisions and adequately plan for the energy transition that is under way.” She said “actioning” the ISP – despite its cool reception from Taylor – was essential, as was the re-writing of the energy market rules and a change in reliability standards to deal with the increasingly ageing and unreliable thermal generation assets.

“We need to get back to more frequent meetings until the job is done. Three or four a year,” d’Ambrosio said.

While Taylor will be reluctant to re-energise the debate over climate and energy policy, the terms of reference for the council specifies that energy ministers are to meet at least twice a year. A total of six meetings were held throughout 2018, however, under Angus Taylor, the council has yet to once meet face-to-face during 2019.

The federal energy minister effectively controls both the scheduling and the agenda for the energy council meetings, with ministers often kept in the dark about what they will be asked to consider until papers are distributed with as little as a weeks notice before the meeting.

The last time it met face to face was in December 2018, at a meeting where NSW energy minister Don Harwin slammed the federal government for abandoning prior commitments to reducing emissions in the electricity sector.

In the meantime, there has been a growing backlog of work commissioned by the COAG Energy Council. AEMO has progressed work on the ISP for 2019-20, and it is understood that the market operator is keen to engage with energy ministers on the results achieved to date and to seek guidance on the next steps for the plan.

The COAG Energy Council had also been actively engaged in developing and overseeing plans for how the electricity market will handle the pressures of summer peak demand periods.

A November meeting would provide an opportunity for Ministers to hear the plans of market operators to maintain summer reliability, but little time to take any urgent measures that may be needed to avoid load shedding events like those experienced in Victoria during the last summer.

COAG will also be keen to hear from the Energy Security Board, who has led work on the Retailer Reliability Obligation and post 2025 energy market design options. It will also need to start the process of appointing the successor to Energy Security Board deputy chair Clare Savage, who was recently appointed to head the Australian Energy Regulator.

At its last meeting, the COAG Energy Council commissioned Chief Scientist Dr Alan Finkel to develop the National Hydrogen Strategy with a deadline to deliver the final strategy by the end of 2019.

Dr Finkel provided a flavour for what may be recommended in the final National Hydrogen Strategy in his presentation to the Clean Energy Summit in July, which received a mixed response due to perceptions it may be used to prop up fossil fuel producers.

Finkel recognised the enormous potential and competitive advantage Australia has in pursuing the production of renewable hydrogen, providing a source of both clean, storable energy, and an alternative transport fuel that could be exported to the rest of the world.

In his presentation, however, Finkel also suggested that to address potential difficulties faced by a lack of energy supply diversity, that Australia should explore options for the production of hydrogen from gas and coal resources.

The presentation raised eyebrows from an audience that, for the most part, sees hydrogen as a means for aiding the shift towards zero-emissions sources of energy, and not one for further propping up the fossil fuel industry.