Day 95: 'Prioritise renewables'
An introductory weekday newsletter from Schwartz Media. Counting the days since Australia had an energy policy.
Good morning and welcome to day 95.
Today in summary: If elected, Labor would underwrite renewable generation and give A$200 million in subsidies for household batteries; the Coalition may struggle to pass its forced divestiture laws; and a new bid for APA Group could be on the horizon.
— Sophie
Today’s policy spin level: 💨💨💨💨
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Ahead of Bill Shorten’s speech today, the papers are reporting Labor’s energy policy for the upcoming federal election will include underwriting clean power generation and A$200 million in subsidies for household batteries. Shorten will say Labor is still committed to the National Energy Guarantee and wants to work with the Coalition “but we will not wait for them”, it has been reported.
“Our willingness to co-operate on a market mechanism doesn't mean everything else gets put on hold.”
"We will prioritise renewables and support firming technologies like storage and gas.”
AFR | The Australian | SMH | The Guardian
The Australian reports Scott Morrison may find it difficult to pass the “big stick” divestiture laws he’s been promoting, as one Liberal MP - Senator Barry O’Sullivan - won’t commit to supporting the bill when it comes to the Senate. O’Sullivan says the antitrust divestment laws should be expanded across other sectors such as banking, agriculture and retail. The Coalition will also need crossbench support in the lower house to pass the bill.
Meanwhile, Energy Minister Angus Taylor has rejected concerns raised by power companies and investors over the proposed laws.
“Well these companies need to do the right thing by their customers and they haven't always done that.”
A consortium of three global infrastructure investors could potentially bid on APA Group now CKI’s bid has been rejected, according to AFR’s Street Talk, which says the group is led by IFM Investors alongside New York-based Global Infrastructure Partners and Canadian OMERS.
“It seems highly unlikely the three investors would be able to match the $11 a share that CKI was offering, given each of them has a higher cost of capital and distinct lack of synergies when compared to the Hong Kong-based CKI. Which turns the attention back on APA's board, and whether it would be willing to accept a lower offer. And if so, how much lower.”
The Commentariat
Bill Shorten has learnt from the pain of the last Labor government on climate policy by avoiding putting a price on carbon and planning to ‘go it alone’, without negotiating with the Greens or the Coalition, writes David Crowe for Fairfax.
“The challenge for Labor is to explain how its commercial deals with power projects will work. One idea is to use “contracts for difference” to underwrite a renewable project, but how much would taxpayers lose if the deal went bad?”
“Shorten’s pledge is to directly underwrite “and invest in” projects, which would suggest equity investments that might also come at a significant cost.”
Three more things
China’s push for cleaner air and quality over quantity of coal is changing Australia’s power generation price settings, according to analysts. While gas has traditionally been seen as the marginal price setter for power generation, black coal from NSW is becoming an increasingly important benchmark.
Business leaders prefer an emissions trading scheme to the NEG, according to a new survey from the Carbon Market Institute. The survey of 272 senior and executive-level personnel found 92% believed existing policies were not enough to meet the Paris Agreement targets, and 82% supported stronger action, including an economy-wide target of zero net emissions for 2050.
The global energy storage market will attract US$620 billion in investments and grow to a cumulative 942GW by 2040, according to Bloomberg New Energy Finance. China, the US, India, Japan, Germany, France, Australia, South Korea, and the UK are forecast to lead the energy storage markets, with the fall in the costs of lithium-ion batteries a key driver.