Day 108: Big stick splinters
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 108.
Today in summary: the ‘big stick’ divestment legislation is softened after pushback from politicians and big business; the Morrison government won’t increase Australia’s Paris commitment to cutting carbon emissions; and Victoria’s energy regulator proposes minimum feed-in tariffs for solar panel owners.
— Sophie
Today’s policy spin level: 💨💨💨
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As foreshadowed, the Morrison government has watered down its forcible divestment legislation after opposition from within the party room and threats of legal action from retailers and business groups. Energy companies could still be forced to sell assets under the law, but only after a recommendation from the ACCC, and the final order would have to come from the Federal Court, not the government. There’s also a sunset clause, meaning the law would expire in 2025.
The SMH reports that the softer laws may make it harder for energy companies to mount a legal challenge against forced divestment. Still, Labor remains opposed and it is yet to be seen whether the Coalition will get the support it needs to pass the bill, which will be tabled today before Parliament rises for the year tomorrow. The AFR quotes shadow Treasurer Chris Bowen saying:
"This ridiculous policy, this Venezuelan-style intervention, this intervention in the economy which would chill investment, has collapsed under its own weight. Abbott-Turnbull-Morrison energy policy 27.0 has been destroyed by their own party. They are pathologically incapable of delivering the country an energy policy."
Environment minister Melissa Price says the government doesn’t intend to alter Australia’s Paris commitment to cut greenhouse gas emissions, the SMH reports. Price will attend a UN conference in Poland where members will discuss their progress towards their goals. Australia is committed to reducing its 2005 emissions level by 26%-28% by 2030.
Victoria’s energy regulator, the Essential Services Commission, is proposing a minimum feed-in tariff for solar panel owners. The ESC’s draft determination, which it’s asking for feedback on, says retailers could pay either a single-rate tariff of 11 cents per kilowatt hour, or a time-varying tariff of between 8.9c and 14.1c/kwh. Consultation closes on January 13th.
The Commentariat
Malcolm Turnbull used his speech at the Smart Energy Council conference in Sydney yesterday to resuscitate the National Energy Guarantee, writes Jennifer Hewett in the AFR.
“Such encouragement apparently means reminding everyone the NEG had previously had no stronger Coalition supporters than Scott Morrison and Josh Frydenberg… Explaining how the NEG became a “casualty” of political events, Turnbull insists, is no more than stating the facts. “They played out in public gaze. So, you know, there's no point pretending it didn't happen.”
Unless, that is, you are a current Prime Minister desperately trying to hold together a party at risk of nuclear fission. The former Prime Minister became a casualty of that pressure in August. Morrison's increasingly tumultuous ride means he looks at overwhelming risk of becoming another.”
Three more things
The International Energy Agency says carbon emissions will rise from the world’s largest economies this year, breaking a five-year decline. The Australian quotes the IEA’s executive director Fatih Birol saying it is important for Australia to integrate increasing renewable power into the grid “in the right way”.
“Power systems without back-up have accidents in terms of security of supply. It’s definitely not good news for the citizens and not good news for the reputation of the grid.”
ACT will trial using renewable hydrogen in place of natural gas, first in network components and construction and maintenance and then for appliances like cooktops and water heating. Hydrogen is seen as having huge potential for Australia, with ARENA allocating A$20 million to accelerating its development in June 2018.
Australia could become a global energy superpower by exporting renewable energy to Indonesia, write Roger Dargaville, Changlong Wang and Scott Hamilton in The Conversation. The three will present a study at the UN Climate Change Conference later this month, arguing in favour of building a link between the Northern Territory and Indonesia.