Day 31: 'We're confident'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 23.
Today in summary: Energy Minister Angus Taylor told parliament the government will not be replacing the Renewable Energy Target after it reaches its peak in 2020; Australia’s energy sector is lawyering up as the prospect of a royal commission into energy looms large; and Prime Minister Scott Morrison cancelled next month’s planned Coag meeting leaving a question mark over a meeting of energy ministers scheduled for later this month.
— Charis
Today’s policy spin level: 💨💨💨
The Renewable Energy Target will not be replaced with anything after it winds down in 2020, Energy Minister Angus Taylor told parliament yesterday. Taylor continued to talk down the need for renewable energy subsidies, arguing no further intervention was needed to reach the 26% emissions reduction target. This goes against the advice of the government’s own Energy Security Board.
“We are absolutely confident that in the absence of those subsidies we will get the investment we need in the network,” Taylor said. He said the government’s energy plan had three parts: investment in “fair dinkum, reliable generation”, a retail price safety net for customers; and driving prices down.
Australia’s large gentailers Energy Australia and Origin Energy are reportedly consulting with lawyers, hedging their bets in case they’re forced to face a royal commission into energy. Royal commissions are on trend for both sides of government right now, and that means specialist lawyers are thin on the ground.
"There is a finite amount of talent out there and a royal commission can do tremendous damage to the business if it's not handled well," one energy insider told the Australian Financial Review.
State premiers will have to wait until after November’s Victorian state election to discuss federal energy policy after Prime Minister Scott Morrison called off October’s scheduled Council of Australian Governments meeting. It’s unclear whether a separate meeting with energy ministers planned for later this month will go ahead.
ABC | The Guardian
Geopolitics
Energy ministers from the European Union have agreed to work together on increasing the use of hydrogen in transport. The 25-country initiative is non-binding but calls for an increase in cooperation on research as the bloc seeks to cut back its dependence on fossil fuels. The EU has committed to cut carbon emissions by 40% by 2030.
Reuters
The Commentariat
A decision by the Foreign Investment Review Board to block CKI Infrastructure’s bid for gas pipeline company APA on grounds that CKI is under the influence of Beijing would be “factually wrong” writes The Australian’s Glenda Korporaal. It would “represent a huge statement on Australia’s side that it no longer regards the official ‘one country, two systems’ - under which Hong Kong operates - as continuing to stand”. The ACCC determined last week not to block CKI’s bid, viewing the takeover as a mere transfer of a monopoly power, but the offer is now being reviewed by the FIRB on national interest grounds.
Three more things
Very few countries are pricing carbon high enough to meet their carbon reduction commitments, according to a new OECD report. The review of carbon pricing policies in 42 countries found Australia was among several less developed countries with a high carbon pricing gap, including India, China and Russia.
"Countries that continue to leave the gap wide open risk high dependency on increasingly uncompetitive technologies and very high transition costs," the group warned.
The US Department of Energy has committed US$120 million over 5 years for a new research centre on battery science and technology. The research will focus on developing new battery materials capable of delivering higher energy capacity than today’s lithium-ion batteries, as well as on new concepts for so-called flow batteries for the electric grid.
China has become the world's largest producer of electricity based on low-carbon coal, reports the China Daily. The state-owned newspaper cites a National Energy Administration official who said by the end of 2017, about 658 million kilowatts of installed coal-fired capacity achieved low-carbon emissions, causing less pollution than that of gas-fired power stations. NEA data shows coal provided 60.4% of China’s energy supply in 2017, having fallen 8.1 percentage points in the last five years.
This is an introductory service while we’re building a comprehensive daily paid online publication, coming in early 2019.
We’re not here to take sides, simply to cut through the noise, and help you make sense of the emerging policy and market trends you need to be across. We call it pure intel. You can read more about us here.