Prime Minister Comments on Energy Security and Costs

On 1 February 2017 at the National Press Club the Prime Minister delivered an address that dealt with, amongst other things, the Energy crisis we are facing. We believe that this is a very well considered position from the PM in relation to this key area.

“Increasing gas supply in Australia is vital for our energy future and vital for industries and jobs, but State bans on onshore gas development will result in more expensive and less reliable energy.  Without gas or substantial new forms of energy storage where will the firming power come from to support intermittent renewables like wind and solar.?   Now we are willing to sit down with the States to determine the right incentives to enable desperately needed sustainable onshore gas development.  Energy storage, long neglected in Australia, will also be a priority this year.  Last week at my request ARENA and the Clean Energy Finance Corporation agreed to work together on a new funding round for large scale storage and other flexible capacity projects including Pumped Hydro.  I have also written to Alan Finkel asking him to advise on the role of Storage and Pumped Hydro in stabilizing the grid.  Large scale storage will support variable renewables like wind and solar.  It will get more value out of existing base load generation and it will enhance grid stability and we are going to get on with them.

Now turning to coal, Australia is the world’s largest export of coal.  We have invested $590 million since 2009 in clean coal technology research and demonstration and yet we do not have one modern high-efficiency low-emissions coal-fired power station, let alone one with carbon capture and storage.   So here is the current picture: old high emissions coal fired power stations are closing down as they age, reducing base load capacity.  They cannot simply be replaced by gas because it is too expensive or by wind or solar because they are intermittent.  Storage has a very big role to play that is true, but we will need more synchronous base load power and as the world’s large coal exporter, we have a vested interest in showing that we can provide both lower emissions and reliable base load power with state of the art clean, coal fired technology.  The next incarnation of our National Energy Policy should be technology agnostic; its security and cost that matters most, not how you deliver it.

Policy should be ‘all of the above technologies’ working together to deliver the trifecta of secure and affordable power while meeting our emission reduction commitments.  Now this isnt an abstract issue.  Higher electricity prices made more pressure on household budgets and businesses and that is why energy will be a defining debate in this parliament.  We determined to help families and businesses by making electricity affordable and reliable.  Labors policies mean high power prices and energy insecurity.  The battle lines have been drawn.  It is clear that the coalition stands for cheaper energy. We are approaching this issue clear-eyed, pragmatic and objective.  Labors approach is driven simply by ideology, heedless of cost with the thousands of jobs that it will destroy”