Taylor says may be running out of time for coal underwriting deal

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Taylor says underwriting proposal may not be completed before the election, putting into doubt the push for new coal investment.

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Energy minister Angus Taylor has finally conceded that the federal Coalition government is running out of time to finalise contracts for new 24/7 power before the election, expected in May.

The Coalition has been running through a frenzied process for the past few months trying to lock in support for new investments in coal and other “fair dinkum” power supplies in what has been widely viewed as a rushed process.

An informal “registration of interest” that closed in late January attracted 66 proposals, including 10 coal plant investments, several renewables and storage proposals, and mostly gas plans, but analysts have wondered how the government could move to a more formal tender, make a selection and then finalise contracts before the anticipated “caretaker” period begins in April.

Taylor appeared to concede this point on Tuesday while announcing the federal government’s decision to inject another $1.4 billion of taxpayer money into Snowy Hydro to try and make its proposed Snowy 2.0 pumped hydro scheme stack up.

“We will get as far through the process as we can before the election,” Taylor told ABC Radio National’s Breakfast program on Tuesday. “If we win the election we will continue on with it.”

Taylor said the nature and number of the proposals meant a complex process of review and assessment for his department

“We have got a much bigger response than we expected …. these are big projetcs, it takes time to bring to fruition. We will move down to a shortlist as quickly as possible.”

The Coalition has said the underwriting proposal is “technology neutral”, but the view that it was keen to back new coal investment was reinforced when it pulled legislation for its “big stick” pricing intervention when the Greens proposed an amendment preventing support for coal generators and won the backing of Labor and the cross benchers.

The push by many within the Coalition to back new coal investment flies in the face of initiatives announced this week by prime minister Scott Morrison and Taylor – $56 million to “fast-track” the Tasmania “battery of the Nation” pumped hydro project, and its support for Snowy 2.0.

A new feasibility study shows that fast-tracking the Tasmania project makes no financial sense unless the exit from coal is accelerated rather than slowed down. Analysts say a similar case can be argued for Snowy 2.0, and the government’s $1.4 billion injection appears to be a concession that it will struggle to break even.

Note: Taylor’s office sought to downplay the idea that the underwriting might be delayed, noting it was a four-year program. It made RenewEconomy wonder if some proposals might be signed without another formal round. We asked but didn’t get a response before publication.

 

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