We must reverse course from energy failure

Source: The Australian Financial Review

9th October 2019

Malcolm Turnbull first declared a national energy crisis at The Australian Financial Review’s Business Summit in March 2016, calling an urgent meeting with liquefied natural gas company bosses ahead of threatened gas export controls: the first of the energy “big sticks”. Suddenly, Australia’s previously hailed big LNG exporters were being blamed, along with state government gas development bans, for undermining the national energy market.

Within six months, previous complaints about expensive “gold plating” of electricity grids were overtaken by South Australia’ statewide power blackout. That sounded the alarm that the world-leading penetration of unreliable wind and solar power threatened the security of energy supply and the stability of the eastern states electricity grid. Months later, French energy company Engie announced the imminent shutdown of the Hazelwood coal-fired power station in Victoria’s La Trobe Valley, leading to a spike in prices.

Six months after Hazelwood’s exit, Energy Minister Josh Frydenberg used our 2017 National Energy Summit to sideline chief scientist Alan Finkel’s proposed Clean Energy Target. This was replaced by the National Energy Guarantee, a product of the energy technocrats, which sought to deliver both lower carbon emissions and enough reliable energy supply. That aimed to provide a policy consensus that would give energy companies the confidence to invest in transforming Australia’s energy system – which in turn would lower prices. But within another year, the NEG was dead too, and had taken Mr Turnbull’s prime ministership with it. It was the fifth iteration of energy policy since 2007. The one constant has been the ending of Australia’s previous competitive advantage in cheap power.

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