Canberra Report - Energy Policy in the Centre - Wednesday, 19 August 2020

Canberra Report - Energy Policy in the Centre - Wednesday, 19 August 2020 Main Image

By Joel Fitzgibbon

19 August 2020

The climate change debate continues at pace and those who want Australia to run ahead of the rest of the world are not helping attempts to establish a sensible policy framework which will allow Australia to do its bit without unnecessarily hurting our economy and costing local jobs.


At the other end of the tussle, the Government is making a sensible policy settlement hard by not honouring the commitments to action it has made, and in-turn, constantly seeking opportunity in the politics of climate change. These two dynamics have left climate change and energy policy in limbo for the past seven years.


The thing to keep in mind is that Australia is responsible for around 1.3 per cent of global emissions and therefore, has limited capacity to cool the planet. That said, we should do our bit as is required under the Paris Agreement – an agreement signed by the Liberal-Nationals Government in Canberra. It is not - or need not be – too complicated or too hard.


Taking action on climate change does not require us to close down our coal mining or any other industry. Readers will have watched more and more people putting solar panels on the roofs of their homes. They’ve seen the large-scale solar and wind farms grow. They have I’m sure, seen the number of hybrid and electric cars travelling on our roads. They have read about the way our largest Australian and multinational companies are changing their investment behaviour with the goal of lowering their emissions profile. They’ve read about the prospects of new technologies including hydrogen.


I’m also confident that readers understand that our current coal-fired electricity generators can’t keep operating forever; at some point they’ll come to the end of their economic and physical lives. Further, that while there are no rules against it, investors are showing no interest in building new coal-fired generators because they don’t believe they can make money from them over the long period required to get their money back. I am hopeful, though, that progress in developing carbon capture and storage technology may keep some of our coal generators running a bit longer than currently expected. Regardless, our local coal mining industry will not be affected because the great bulk of our coal goes to export markets.


What Australia needs is an energy policy agreed by both the major political parties so that investors know what the regulatory framework is going to look like for the next thirty years and beyond. For seven years now we’ve been without an energy policy and that is stifling investment in all forms or electricity generation and putting upward pressure on electricity prices. If we can secure more investment by establishing the rules, there is no doubt renewables will grow as a proportion of generation markets. I’m very pleased that, locally, AGL is not waiting and is progressing its plans for new pumped-hydro, gas and battery storage projects.


Gas is going to be criticaly important both as a transition fuel to a cleaner economy and as a job-creator. Let’s be frank, there are not many more jobs in gas generation than there are in the renewables sector. But there are two important points; gas is cleaner than coal and will be cheaper if we can extract more of it and get it to market more efficiently through new pipelines. Second, by delivering secure and more affordable gas to industry we can make our manufacturers more competitive and therefore, start growing the sector again. That means more manufacturing jobs.


The other point to remember about gas is that it is not used only for electricity generation. About one third is used for generation by the power companies but another 10 per cent is used by industry for their own generation and heating. Very importantly, another one-third is used as a feedstock (ingredient) in the manufacturing of fertilisers, rubber, plastics and many other essential products. The Government must make the delivery of more affordable gas to industry, and indeed, all of us who burn it in our homes. It will also help our transition to cleaner economy.