Morrison’s gas plan a disaster, says consumer advocate
Leading energy consumer advocate, the Public Interest Advocacy Centre (PIAC) has dismissed the government’s plan to increase the supply of gas as a capitulation to lobbyists that is risky, expensive and an ineffective way to help people struggling with high gas prices.
“It is disappointing that the Morrison government has ignored advice from experts and calls from the community in its ‘gas-led recovery’ plans,” said PIAC’s Craig Memery.
“There are myriad ways to kick-start the economy now and help people afford their energy bills in the future.
“Using government money to expand the extraction and use of fossil fuels is not one of them.
“Gas extraction creates very few jobs and subsiding its supply is unlikely to deliver lower gas prices for consumers.
“Instead of sinking taxpayers’ money into unnecessary and uneconomical developments, the government should be using the COVID-19 recovery to help people and businesses struggling with high gas prices either transition away from the fuel or afford it where they can’t,” said Mr Memery.
He explained that public money is better invested in renewable energy and job-rich projects that will help people afford their power bills, such as an energy efficiency scheme for low-income homes.
In June, PIAC joined more than 50 other groups including the Australian Industry Group, the Australian Council of Social Services and National Shelter to call for an energy efficiency and solar installation program for low-income households.
“Improving home energy efficiency creates jobs, helps people lower their energy use and bills, lowers emissions and reduces demand on the grid,” said Mr Memery.
“This proposal was supported by a wide range of community, consumer and business groups, the federal government should support it too.”
The government’s proposals to fund a new gas generator in the Hunter Valley and to underwrite projects such as pipelines are disruptive to the gas and electricity markets and add costs to both Mr Memery explained.
“Existing gas generators have a role in providing short bursts of energy when needed while the energy system becomes completely renewable,” said Mr Memery.
“However, gas is on the way out and the government intervening to build a new gas generator creates uncertainty, mixes signals and makes the transition to renewables costlier.
“Nothing is preventing investment in effective pipelines today,” said Mr Memery. “The government shouldn’t be making investments where the private sector will not.”
The government suggestion of a voluntary industry-led code of conduct for gas companies is unlikely to empower gas consumers.
“If government was serious about affordability it would be imposing regulations on profitable energy businesses not giving them handouts,” said Mr Memery.
What did you think of Morrison’s announcement of a gas-led recovery?
Billionaire technology leader and strong renewable energy supporter Mike Cannon-Brookes has expressed an interest in developing an option to replace Australia’s ageing Liddell coal-fired power plant if the conservative Liberal-National government can clearly identify the rules of engagement for any proposals.
The prime minister, Scott Morrison, said in a speech yesterday the government would back the construction of a new gas-fired power station in the Hunter Valley if the energy company AGL failed to replace Liddell.
Almost immediately Mr Cannon Brookes began engaging the Prime Minister on Twitter, demanding to know what the rules of the proposal were and indicating he would come up with a renewable solution.
Mr Cannon-Brookes later told Guardian Australia the prime minister needed to be clear about what the government was proposing and then let the market sort out the optimal replacement.
“Would I seriously have a look at this? Yeah, why not,” the tech billionaire and co-founder of Atlassian said.
“Let people come and bid, don’t force the solution and declare the outcome.
“What I’m saying is declare the rules and put it out to the market and that will get the best outcome for consumers.
“Be clear about how much money you are going to put up, don’t say if it’s a gas plant I’ll put up $500 million but renewables don’t need any subsidy, that’s literally what Mr Morrison said, renewables don’t need the subsidies, but gas does.
“I mean, what? Giant fossil fuel companies need subsidies to extract gas and export it? No, they don’t, that is bullshit. So, declare the rules of the game. That’s the way to get assets built.
“If those rules existed, would I, potentially, with friends, be interested in looking at them seriously and potentially putting in a bid? Absolutely. Give us the rules, let’s start by putting the rules together.”
Mr Cannon-Brookes said Mr Morrison had put a confusing proposition into the public domain when he outlined the next steps in the Liberal-National government’s gas-led recovery from COVID-19.
Mr Morrison had argued his government was “technology agnostic but we are going to go and build a gas plant, that doesn’t make sense”.
“The engineers, the scientists, the economists, nobody is asking for that thing, so just be clear,” Mr Cannon-Brookes said.
“If you are going to say I am building a gas plant, just say I’m building a gas plant, don’t smoke it with ‘lower prices’, this will result in higher prices.”
In his speech, Mr Morrison pointed to new commitments in the October budget, including funding of $52.9m to unlock more gas supply and boost transport infrastructure.
In a warm-up for substantial budget commitments, Mr Morrison held open the option of taxpayer underwriting for priority gas projects, streamlining approvals or creating special purpose vehicles for new investment.
However, he said “renewables like solar and wind don’t need subsidies”.
The government says it is giving the private sector until the end of April 2021 to reach final investment decisions on 1000 megawatts (MW) of new dispatchable capacity to replace Liddell, with a commitment for generation in time for summer 2023-24.
If the commitment is not forthcoming, the government said it would take steps to ensure the required dispatchable capacity was built.
The Australian Energy Council, which represents major electricity and gas retailers, said the government, with threats of heavy-handed intervention, was actually risking the investment it said it wanted.
The council’s chief executive, Sarah McNamara, said when it came to the energy market, “there are no material reliability concerns that would warrant this kind of interventionist approach, and there are already mechanisms in place to address any shortfall identified”.
She said the most recent assessment by the Australian Energy Market Operator (AEMO) identified a potential shortfall in New South Wales of only 154MW.
Ms McNamara said lack of policy certainty was the most substantial restraint on investment.
Yes, a silly article but we also have sunlight- a much saner & cleaner fuel. The burning of the fossil fuels is a guaranteed way to poison ourselves as well as a waste of resources. The storage of the solar energy for use in the dark hours can be done - think snowy scheme or even hydrogen gas, etc. Its time for Oz to move on from being a 'lucky' to a 'smart ' country.