Frydenberg 'absolutely confident' energy prices will fall but gives no guarantee
The energy minister, Josh Frydenberg, has stopped short of guaranteeing prices will come down under the Turnbull government’s new energy policy, but says he’s “absolutely confident” power prices will fall.
Frydenberg also indicated the major parties might be able to come to terms on the mechanism, which imposes reliability and emissions reduction obligations on electricity retailers.
He said it was possible Labor might agree on the mechanism but propose a more ambitious level of emissions reductions, with that a point of difference between Labor and the Coalition at the next federal election.
“It is very important for industry that they have investment certainty,” Frydenberg said. “And that investment certainty comes from having the mechanism in place so that they can prepare their portfolio of assets into the future”.
“Now, knowing that they will have to have a certain amount of emissions intensity and knowing that they will have to have a certain amount of reliability is something that they can plan for”.
Frydenberg said he was “hopeful”, despite the current negativity from the opposition, that Labor would come on board federally “because the clean energy target, which was Dr Finkel’s recommendation, does not reduce power prices as much as this will”.
He said new modelling the government had commissioned would be shared with the opposition and state governments in the leadup to a Council of Australian Governments meeting in November.
Frydenberg said the new investment mechanism would give existing coal assets “a very good chance of continuing through extending its existing life”, but he played down the idea the government would invest in a new high-efficiency coal plant, which is what some rightwingers in the government, including Tony Abbott, want.
Frydenberg slapped down Abbott’s campaigning, noting “Tony Abbott isn’t the prime minister, nor the government”.
He said the partyroom had strongly supported the national energy guarantee.
Frydenberg said the government had “nothing against the new coalfired power station being built, and I would welcome the extension of existing coal-fired power stations”.
“But what is very important about this mechanism is that it allows for technology neutrality, so, renewables, which are becoming very low cost, can compete in that market, but they can do so in a way that doesn’t compromise affordability and reliability”.
He suggested any new coal plant would have to be privately funded.
With the state on the brink of an election, the Queensland government is also threatening to re-enter the electricity supply industry if power companies don’t cut bills.
The premier, Annastacia Palaszczuk, is expected to meet electricity retailers in the state this week.
“They will be given an ultimatum – pass on savings delivered by my government in full to consumers, or face more competition from a retailer owned by my government,” she told the Sunday Mail.
She said the Queensland government could do it because it still owned the power stations, poles and wires.
The then premier Peter Beattie sold the retail arms of Ergon and Energex in 2006 following advice that prices would go down because of market competition.
Frydenberg declared on Sunday the threat was a “smokescreen” to divert from reports governmentowned generators were price-gouging by bidding at uncompetitively high prices.
He said CS Energy and Stanwell had raised $1.5bn for the Palaszczuk government while wholesale electricity prices had risen by an average of 30%.
“The Queensland government’s got a lot of explaining to do to its own public as to why it’s been happy to put this electricity tax on its own people,” Frydenberg said.