24/02/2021

(AU) Energy Policy Paralysed As Nationals Firm Up Demands

AFRPhillip Coorey

Distrust and division within the Coalition over climate change is behind an ongoing delay to pass legislation that would broaden the remit of the Clean Energy Finance Corporation to include gas.

The government would only say on Monday that it remained committed to the legislation, which it withdrew suddenly from the Parliament last week after Barnaby Joyce gave notice he wanted the remit broadened to include coal.

Energy Minister Angus Taylor says he remains committed to the CEFC bill. Alex Ellinghausen

At their party room meeting on Monday, the Nationals officially broadened that demand to also include nuclear power and carbon capture and storage technology.

The Nationals’ demands – to be put as amendments to the bill – will fail because they do not have the support of either Labor or the Liberals, other than renegade Craig kelly who is siding with the Nationals.

But the government worries that someone in the Nationals, or Mr Kelly, may cross the floor after the amendments are defeated and vote with Labor to defeat the original bill.

And because the entire Nationals party room now supports the coal and nuclear power amendments, it is unclear what the National Party ministers will do when their backbench colleagues cross the floor to support the amendments.

Coalition ministers who cross the floor are expected to resign.

Nationals ministers include Deputy Prime Minister Michael McCormack, as well as cabinet ministers David Littleproud, Keith Pitt and Darren Chester.

“Porter and Taylor are trying to work it all out,” one senior Liberal said of tactics manager and Attorney-General Christian Porter and Energy Minister Angus Taylor.

The stand-off is also reopening the dispute within Labor, with MP Joel Fitzgibbon, who always supported giving the CEFC a gas mandate, urging his colleagues to support it and cut the Nationals out of the picture.

The CEFC is a $10 billion loan vehicle for clean energy projects. The legislation under question would establish a $1 billion Grid Reliability Fund to be bolted on to the CEFC.

The government wants the flexibility to use this $1 billion to underwrite gas projects as part of its plans to boost baseload generation competition, as well as any other gas initiatives deemed necessary to back up renewable energy.

The bill says the definition of low-emissions technology would be expanded to include any projects that “support the achievement of low-emission energy in Australia”, including “certain types of gas-fired electricity generation”.

The bill was pulled last week when Mr Joyce, without notice, moved his coal amendment, and it has not been seen since. The government will not say when it will reappear.

Shadow climate change minister Chris Bowen said the government was a circus that was paralysed by its own division.

“This level of chaos would almost be funny if energy policy chaos didn’t make prices higher for consumers and business and costs jobs. Yet, after eight years and 22 policies, the circus continues.”

Mr Fitzgibbon said Labor should rethink its opposition to the original bill, which enables gas to be used as a firing fuel.

“Labor’s decision to oppose the bill has only served to empower the National Party rebels and may lead to a less optimal outcome than that proposed in its current construction,” he said.

“We should consider cutting a deal which would guarantee that, say, half the $1 billion at stake is used to leverage renewable firming generation and grid enhancement.

“That would leave the board free to back a limited number of gas-peaking projects with the balance of the funds. A Mexican stand-off is a recipe for summer blackouts. Under that scenario, we all lose.”

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