There was a seminal moment in the Bali climate conference way back in 2007. And, no, I’m not talking about the appearance of a vainglorious Kevin Rudd finally signing the Kyoto Treaty, although that was a moment.
It came when the representative from the PNG delegation told a glum-faced US team that they should get out of the way if they couldn’t bring themselves to contribute in a positive way. It was a pivotal moment and helped lift optimism that a deal could be landed in Copenhagen two years later, even if that didn’t turn out so well.
But getting out of the way, or getting in the way, has been a key consideration in climate change and clean energy circles. For much of the past decades, key strategies have focused on delay: The incumbents and fossil fuel interests on delays to policies and treaties, and the activists on delays to key projects.
Energy minister Angus Taylor has clearly figured this out, too. It is now two years since his appointment, and anyone wanting to gauge his impact on the industry and the clean energy transition in Australia only needs to look at the graph below.
It’s all about delay. It shows how, since Taylor’s appointment in late 2018, investment in new wind and solar farms has been falling dramatically from near-record highs to near-record lows. Only three new projects reached financial close in the last quarter – and 90 per cent of that capacity came from a single solar farm courtesy of the Queensland Labor government.
In the month of July, according to new data from the Clean Energy Regulator, just 9.5MW of large-scale renewables were accredited – about one twenty fifth of the new capacity installed on Australian rooftops – and investment confidence is now at a record low.
Taylor is more than just partly to blame.
To put this in context, Taylor was appointed to his role by prime minister Scott Morrison, the man who had brandished a lump of coal in parliament, telling Australians “not to be afraid”; who had ridiculed the Tesla big battery as being about as useful as the Big Banana, and who had surrounded himself with former coal lobbyists (they even lacquered the lump of coal he took into the House).
Morrison led and leads a party wracked by climate denial and renewables angst. For them, and Morrison’s inner circle, Taylor’s credentials were impeccable to be the new energy minister.
This is a man, after all, who had campaigned relentlessly against wind farms before he entered parliament, including with Alan Jones at a so-called “wind fraud rally”; who had tried as a backbencher to get the renewable energy target scrapped and who then declared, soon after taking his ministerial office, that there was already “too much wind and solar” in the grid.
Taylor has also shown that he can match his boss and his colleagues when it comes to saying some pretty stupid things about climate and clean energy. Consider his absurd and discredited claims against Sydney Lord Mayor Clover Moore and his endless scare campaigns about electric vehicles in the lead-up to the last election. (It’s notable that an EV policy is nowhere to be seen).
But the key difference between Taylor and other prominent and vocal anti-renewables campaigners like Craig Kelly is that the minister knows what makes the market tick and, like a malevolent watch-maker, knows which strings to pull to make the machine go backwards.
In a world of rapidly shifting global investment trends, of extraordinary technological advances, and where the climate science and the need to act is becoming ever more compelling, it’s a remarkable if disturbing and dangerous achievement.
How has Taylor managed to do this?
Firstly, Taylor understands that investors thrive on three commodities: a policy signal, a price signal, and some level of investment certainty. It was easy enough to remove the policy signal by not having one. The renewable energy target is effectively met, and contrary to his own claims, it has helped deliver the fall in prices that is currently making new projects less attractive. Not that he’d ever admit it.
Taylor, however, has refined the lack of policy by making strategic interventions that have removed the third signal – some level of investment certainty. He’s kept everyone in the dark, on everything from the funding of ARENA, the closure of Liddell, the plans to support new investment, the push for a new coal generator in north Queensland, and in the “technology roadmap”.
Unpredictable government intervention has now replaced the lack of policy as the second most important obstacle to new investment, according to the CEC’s investment confidence index. Taylor hasn’t gotten out of the way, he’s erected bollards on the road to clean energy.
Take the Underwriting New Generation Investment program as a prime example. It was unveiled with great fanfare and a great sense of urgency nearly two years ago. It had 12 “dispatchable” energy projects on its shortlist, and last year two projects were identified for further talks.
Eight months later, still nothing. No funding deal has been finalised, and the uncertainty is cited as a block to other investment by everyone from ESB chair Kerry Schott to AGL boss Brett Redman. A policy designed to accelerate investment has had the opposite impact. The only question is whether this is deliberate or incompetent.
ARENA is running out of money. Will it receive more? Taylor’s not saying. He even kept his decision on the board to himself and his advisors until the 11th hour – announcing the appointment of Coalition favourites on the very last day of the incumbent board’s tenure. Some say Taylor supports new funding but is being blocked by finance minister Mathias Cormann. But it is not as though Taylor is a loud supporter.
State energy minister Matt Kean is in no doubt about what he has taken from the review. “I’ve got serious concerns about a proposed extension of Liddell, particularly around worker safety. We know this is an ageing bit of kit,” he told the Energy Insiders podcast.
But Taylor is sitting on the results, refusing to release the report, possibly for fear of upsetting the right wing of the party, and the conservative media. He’s also sitting on the funding for the increasingly controversial idea of funding a feasibility study for a new coal generator in Queensland by a company with no experience in energy.
What are Taylor’s policies? He has none. The emissions reductions that are occurring come from the increase in wind and solar output due to policies he tried to stop. The “safeguard” mechanism that applies to some big emitters has proved to be a complete joke. In the international arena, he has prosecuted the argument that Australia should use its “Kyoto” surplus to help meet its weak Paris targets.
Taylor’s only initiative is his Technology Roadmap. But rather than embrace the technologies prioritised by the report – wind, solar, storage, and EVs – Taylor, like the rest of the Coalition, is obsessed with gas.
In the broader market, and despite the efforts of the states to try and “do their own thing”, either with their own renewables targets or infrastructure spending, investment is at a crossroads.
Big investors and financiers are wondering whether Australia is simply too hard. New projects have been delayed and hundreds of millions of dollars lost by the lack of planning in investment infrastructure.
This is partly due to the lack of leadership by the Coalition government, now in power for seven years, which has allowed reluctant regulators and rule-makers to drag the chain.
Even now that the Australian Energy Market Operator has a plan, a 20-year blueprint to manage what it sees as the world’s fastest energy transition, and a switch to up to 94 per cent renewables by 2040, Taylor shows no interest.
The contrast with state ministers – including from Liberal states such as NSW, South Australia and Tasmania – could not be any more stark. And now even those discussions have been moved behind closed doors, as the COAG system is replaced by the “national cabinet”. Taylor is now able to control the narrative as well.
Industry players are privately scathing. But it takes a rival politician to go on the record and share what many think.
“Two years of scandal-ridden Angus Taylor has been a disaster for the Australian energy industry and consumers,” Labor climate change spokesman Mark Butler says.
“Angus Taylor came into the portfolio boasting of his energy expertise but what Australia has instead experienced is the worst energy minister in living memory. Whether it is renewable energy investment collapsing or being caught up in whichever scandal he is currently involved in, Angus Taylor has set a new standard for incompetence.”
