Senior National and former Senator Ron Boswell makes sense in an opinion piece on the current energy debate, highlighting the need for contractual certainty for electricity suppliers.
Australian Conservatives founder Cory Bernardi says low-cost baseload energy is essential to guarantee supply and ensure low electricity prices. Senator Bernardi has also praised the former Senate National Party leader for consistently warning the Coalition party room that a renewable energy target would spell disaster for Australia.
Writing in today's The Australian newspaper, the former Queensland Senator says:
"The millstone around the neck of Australia’s energy policy is the renewable energy target. It is a remarkably generous gift to wind and solar energy, and one that will keep on giving until 2030.
It is impossible to debate energy policy sensibly without reference to the gold-plated pipeline of tens of billions of dollars of consumer and taxpayer-funded subsidies to the renewable sector.
The unprecedented government intervention in the energy market embodied in the RET is essential context to the debate about the future of the Liddell coal-fired power station in NSW’s Hunter Valley. We know its closure will cause electricity prices to rise unless it is replaced by comparable low-cost baseload energy.
We have seen this before. The closure of Hazelwood in Victoria’s Latrobe Valley led to wholesale energy prices rising by 85 per cent. With the energy market tighter than ever, it stands to reason that Liddell’s closure will cause a large surge in electricity prices.
Higher prices are an appetising prospect for Liddell’s owner, AGL. That’s why it doesn’t want to sell Liddell to another operator that would keep it open for up to another decade.
AGL’s chief executive, Andy Vesey, clearly isn’t worried by the impact on energy consumers from large manufacturers such as BlueScope to small businesses and low-income Australians. But don’t take my word for it. As the Australian Competition & Consumer Commission’s Rod Sims said on Friday, AGL is “quite happy to not give much thought to the public interest”.
Why doesn’t the government act to get more supply and more competitors into the energy market in a pro-market way?
Given that the authorities believe supply will be short and prices too high if Liddell closes, the government should put out a tender for the supply of up to 2000 megawatts of power (Liddell’s nameplate capacity). It should dictate that the supply must be reliable and available 24/7, and that the lowest price will win the tender. No subsidies for any energy source. The option could hardly be less socialist.
Given the ACCC has expressed concern about the lack of competition, it also should indicate that a new operator or group of generators is preferred. But the overriding consideration should be price.
The power should be contracted for at least 15 years, thus eliminating the political risk posed by the threat of a change of mind by an incoming government.
There will be plenty of investor interest, within Australia and from overseas. And it’s an approach consistent with pro-market principles. It would mean assured supply for energy-intensive manufacturers and price relief for households and pensioners.
For the first time in a long time the energy market would have some real competition. For the first time in a long time, the energy consumer would be the winner."
To read Ron Boswell's full article, click here.
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