The Australian Greens oppose the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 (the bill).
The failure of successive Liberal-National prime ministers to accept and address the climate crisis has led to higher energy prices.
Since the Abbott government's abolition of the Green-Labor carbon price, pollution has increased year after year and electricity prices have continued to rise and are now higher than when the carbon price was in place.
The uncertainty about carbon risk, caused by the failure to put in place a new national energy policy with clear emission reduction goals, has led to a lack of adequate investment in new energy generation.
The Abbott government’s war on renewables, followed by the Morrison government’s war on energy companies trying to manage the retirement of old, unreliable coal fired generators and the transition to renewable generation, has exacerbated the uncertainty for investors.
Instead of a clear timetable for the retirement of coal fired power stations, proper planning and investment in grid infrastructure and a clear pathway to zero-emissions in the electricity sector, the electricity market has had a war of words, threats and ad hoc policy bubbles.
The bill represents that latest round in the Liberal-National’s ideological war on a rational energy transition to renewable energy.
Dressed up as a bill to deal with electricity prices, it is clear the main motivation for the bill is to enable the government to bully power companies to keep unreliable, old and dirty coal fired power stations open longer.
Contributions from government members during debate in the House of Representatives were explicit on this point. They said the ‘big stick’ of the divestiture powers in the bill were necessary to stop AGL from refusing to sell the Liddell power station instead of retiring it.
It is absolutely clear that the government hounded the former Chief Executive Officer of AGL out of the country, then established a Liddell task-force and now has introduced this bill all with the express purpose of keeping one of Australia’s dirtiest power stations open.
If the bill was just about electricity prices as some in the government wish to claim, the government would have accepted Greens amendments that made clear the bill could not be used for the purposes of forcing a company to keep an asset such as Liddell running beyond its accepted life. But they did not.
In fact the government, with the support of the Labor opposition, has pushed ahead with this bill which will be used to keep Australia’s ageing dirty coal energy fleet running longer and holding off the energy transition that is so desperately needed. The amendments secured in Labor’s deal with the government to protect workers’ entitlements do not justify any support for the bill as a whole.
There is no doubt that we are in a climate emergency.
Much of Australia is in the grip of the most severe drought on record and regional towns are running out of water. The fire season is starting earlier and the fires are more severe. This, as the scientists have warned us, is just the beginning of a cascading series of climate impacts that will lead to devastating consequences for Australia and the world.
For example, a recent new report on sea level rise warns that many Asian cities including Mumbai, Shanghai, and Bangkok will be inundated by 2050—a mere thirty years away. These are the key cities of some of our biggest trading partners.
According to the IPCC, to have any reasonable chance of keeping global warming to 1.5 degrees, the world must close at least two-thirds of its coal fired power stations by 2030. In Australia that means retiring one coal fired power station a year over the next decade.
But the government’s policy is to keep our coal fired power stations open as long as possible, including through the use of the powers in this bill.
The powers contained in the bill are largely friendless. Evidence to the committee and statements in the media show that almost the whole of the energy sector is opposed to the bill. A number of legal bodies and energy policy experts have also expressed deep concerns including the Grattan Institute and the Law Council.
The powers in the bill have not been requested by any of the agencies tasked with managing the energy market and in fact the government commissioned ACCC inquiry and report into electricity prices did not recommend the powers.
The Standing Committee for the Scrutiny of Bills has also raised concerns about the reversal of onus of proof in some of the offences contained in the bill.
Many of the detailed concerns are canvassed in the majority report of this committee, but the critical concern which goes to the heart of the bill is the increased uncertainty this bill and the powers contained within the bill will create for investors in an already deeply uncertain energy sector.
Beyond the threats of litigation and divestment from the current government that this bill will enable, the investment environment in the energy sector is already deeply uncertain because of the government’s failure to accept the need for a national energy framework that deals with the climate crisis.
As a result of the policy uncertainty created by the government’s unwillingness to accept the climate crisis, investors making decisions on a thirty to fifty year time frame are less willing to make these long term investment decisions. It is this ‘investment strike’ driven particularly by the uncertainty on the future for coal fired generation which is driving the increase in electricity prices. This bill will make the problem worse.
Recommendation
That the bill be amended to prevent orders being able to be made which would have the effect of inhibiting, delaying or stopping a planned closure of a coal-fired generator.
Recommendation
That the bill not be passed.
Senator Richard Di Natale
Leader of the Australian Greens
Senator for Victoria