The deputy prime minister, Barnaby Joyce, says any new investment mechanism for the energy sector, be it a clean energy target or an alternative, will need to keep coal-fired power stations open.
Asked on Wednesday whether he agreed with a clear statement he made in mid-July that he would support a clean energy target if it was set with a threshold allowing high-efficiency coal in the mix, Joyce said the government needed to make “a diligent plan to keep coal-fired power going.”
During a press conference where he faced repeated questions about the government’s lack of a settled energy policy, Joyce was also asked about the government’s proposed export controls, which are designed to keep more gas onshore for domestic supply.
Labor has been making a case that the government may be delaying pulling the trigger on the export mechanism because Joyce is the acting resources minister, and currently faces questions about whether or not he is eligible to be in the parliament, which potentially leaves his ministerial decision-making open to legal challenge.
The deputy prime minister pointed to the fact that gas companies had already responded to the government’s intervention by making more product available, before appearing to argue he had not pulled the trigger on the gas mechanism because it wouldn’t deliver the desired result.
“If we pulled the trigger on this some time ago then would that gas we brought onto the market be there? No,” Joyce told reporters.
The government is now inching towards making a decision on a new investment mechanism for the energy sector, and it has been clear for some time the Coalition will not implement the specific clean energy target modelled by the chief scientist in his review of the national electricity market.
Finkel’s target was modelled at a level where coal would not get certificates, and the Nationals have been making it clear for months that keeping coal in the mix is the price of their support for any policy change.
As it moves towards crunch point, the government is making it clear the new investment framework, which it wants to resolve before the summer parliamentary recess, will need to be geared to reliability and affordability as well as to emissions reduction, and encompass all technologies.
The treasurer, Scott Morrison, told reporters the government was working to deliver a mechanism that would provide certainty for investors and would encompass “an all-of-the-above approach when it comes to the resources that are required to drive our energy sector” – including coal-fired power.
But the former head of the Clean Energy Finance Corporation says there is no investor appetite for a new baseload coal-fired power station in Australia, despite the government’s repeated promotion of the idea.
Oliver Yates, who stood down from the CEFC in 2016, rejected political arguments that too much attention had been paid to building renewable energy projects in recent years and not enough attention has been paid to storage.
Yates told the ABC the major problem in the national electricity market was the lack of interconnectors which could transmit power quickly and efficiently across state borders.
He also defended AGL’s decision to close the ageing Liddell power plant in New South Wales and give the market several years notice of its intentions. “AGL was kind enough to announce almost two or three years ago that they intended to shut down Liddell in 2022”.
“Even under the Finkel review, [it] only requires that coal-fired power stations give three years’ notice. AGL gave about seven.
“What that enabled was the market to get on with working out how they were going to provide replacement capacity [of electricity] so people have been looking at transactions to invest in, and finding ways to replace, the capacity that would be lost when Liddell falls out of the market.”
Yates, a former Macquarie banker who stood unsuccessfully in 2009 for NSW Liberal preselection for the Senate, said the Turnbull government should get out of the way and allow AEMO to do its job.
“If people just allowed AEMO to just get on with the job, as was set out under the Finkel review, then the government could back away from being involved in these discussions.
“AEMO in the report has stated what they’re currently doing. Finkel actually required a whole variety of aspects and steps to be taken, including the establishment of an energy security board, the establishment of an expert panel and working groups, to follow through the Finkel recommendations.
“If the government just allowed AEMO to get on with the job of ensuring that we have reliable and stable supply then it would probably become de-politicised.