Malcolm Turnbull’s new energy policy will see little reduction in consumer energy bills over the next decade, and that’s outrageous.
In an era where renewable energy costs are plunging, where the costs of rooftop solar are about one-sixth the cost of grid power, Australians are paying absurd prices for their electricity – upwards of 40c/kWh and not just in South Australia.
But the Coalition’s new scheme can envisage only a slight reduction over the next 12 years. That spells an abrogation of the government’s duty, and it spells trouble for the future.
The new plan commits Australia only to the Abbott down payment of a 26-28 per cent cut by 2030, and has co-opted the Energy Security Board to ensure that the electricity industry accounts for just one-third of that target. It should, and could, do a lot more.
Renewable energy is abandoned, with no obvious incentive to develop new generation. And consumers will come last, because the power, quite literally, is conferred upon the big retailers and generators and their complicated series of price caps and hedges.
Turnbull says it is about reliability, emissions and affordability, but the policy, unveiled on Tuesday, appears to be an own goal on all three counts: Australia simply cannot afford to dump climate targets, wind and solar are clearly cheaper than fossil fuels, and relying on ageing coal generators seems a recipe for disaster.
There is no path for falling energy costs, because the system will rely on the very institutions that have been gaming the market for the last decade. Reliability may be maintained, but at the cost of gold plating the coal and gas industry in the same way that regulators encourage and allowed the networks to do.
Most of all, it’s killed the chance of a bipartisan agreement. It’s a sorry tale. And unless something mighty surprising emerges in the next few months, when the policy details are finalised, it will have got us nowhere.