Jay Weatherill, Financial Review, Feb 13 2017
These companies make their own decisions about when to turn the power on and off.
Last week, South Australia experienced forced blackouts when private companies lawfully withheld spare generation capacity in accordance with their commercial interests.
This is an unacceptable situation for industry and households.
Last week, we saw industry being shut down in NSW in a load shedding event. This is in a state with no renewable energy target and the lowest mix of renewable energy power. In Queensland, another state where coal is dominant, we have seen price volatility at levels much more extreme this year than in South Australia.
And on Monday we read in The Australian Financial Review that the closure of the Hazlewood power station would lead to increased supply uncertainty in Victoria next summer.
With that and another nine coal-fired power stations closing across the country, and with nobody willing to invest in existing or new coal-fired generation, we are now facing a national crisis.
When Malcolm Turnbull flagged his intentions to become prime minister of this nation, he said our nation required a style of leadership that respected the people’s intelligence, that explained complex issues, then set out a course of action and made a case for it. He said we needed advocacy, not slogans, and that we needed to respect the intelligence of the Australian people.
Contrast those words with the scenes in federal Parliament last week, as senior federal ministers passed around a lump of coal.
On Monday, we saw a call for an end to the partisan energy politics from the most diverse coalition of interest groups you are likely to see, including the Business Council of Australia, the ACTU and the World Wide Fund for Nature.
These groups are right to call for an end to this toxic debate, which they say has “made energy investments impossibly risky”. All sides of politics must now heed this message and act in the national interest.
Fortunately for the Prime Minister, there is already an answer.
An emissions intensity scheme, one of the solutions canvassed by Chief Scientist Alan Finkel, represents the cheapest and most effective pathway to energy security, affordability and cleanliness.
An EIS places the cost of adjustment on the dirtiest generators, and reinvests it into transitional technologies, such as gas-fired generation, which will enhance competition, provide energy security, with a fuel that is half as carbon polluting. Rarely does a policy achieve three simultaneous policy objectives.
Importantly, an EIS enables an orderly transition for the existing coal-fired generators, reducing the risk to the reliability of the system and to the livelihoods of many working people.
The Prime Minister himself has strongly advocated for this scheme in the past, calling it “cheaper, greener and smarter”.
It is supported by the CSIRO, Energy Networks Australia, Australian Energy Market Commission and the Business Council of Australia.
Industry, including South Australia’s biggest energy user, BHP, knows that policy uncertainty must end. An EIS will achieve this.
Crisis is avoidable
Importantly, it has been supported by federal Labor and the Nick Xenophon Team.
The crisis engulfing Australia’s electricity system is damaging investment, our economy and our environment.
It is a totally avoidable crisis.
It is caused by a government that cannot manage its own internal divisions to do the basic job of governing the country and setting sensible national energy policy.
The Prime Minister has asked us to take ideology out of the debate and leave everything on the table.
If he is true to his word, he should keep an emissions intensity scheme on the table.
Jay Weatherill is the Premier of South Australia