All energy sources needed to change the ‘status quo’ on NSW power prices

August 01, 2018

See the print version here.
All energy sources needed to change the ‘status quo’ on NSW power prices

 

When it comes to the current state of electricity prices the status quo is not an option.  


For pensioners rugging up at night to avoid huge heating bills, the status quo is not an option.  For families anxious every time they open their power bill, the status quo is not an option. For businesses trying to stay in business as electricity prices rise, the status quo is not an option.


And now it’s official.  According to the most recent power price modelling released by the independent Energy Security Board (ESB), ‘the status quo is not an option.’


Sadly, calling for action to lower our electricity prices has become a cliche. Yet it’s utterly ridiculous that in a country like ours, with an abundance of energy resources, we are paying some of the highest energy prices in the world.


In the absence of anything else, an agreement on the Turnbull Government’s National Energy Guarantee (NEG) is needed. It’s time for an agreement that provides some certainty on our national energy policy direction for the future.  However, many feel that energy policy in this country has been hijacked by anti-coal campaigners that are trying to bully the rest of us to do without a central part of the solution – affordable, reliable low-emissions coal-fired power.


It’s also time for our national energy policy discussion to rise above the self-serving myths and juvenile name-calling we’ve seen recently. As long as some opposed to coal continue to call those with a different approach 'knuckle-draggers' it’s hard for the rest of us to see how sensible outcomes can be achieved. Those concerned about whether the lights will stay on, or whether pensioners will be able to afford to heat their homes should not subjected to tawdry schoolyard insults.


While the NEG is supposed to be technology neutral, the ESB report also shows the risk of too heavy a reliance on intermittent sources of electricity generation. The modelling shows that while prices will fall in the short term under the NEG, the closure of more coal-fired power stations and their replacement with more renewables will mean higher prices in the long run.


This seems strange, given we’re being told over and over again that renewables are now the cheapest form of generation. If this is true then surely more of these low-cost renewables should mean lower prices, not higher prices?


The ESB modelling also highlights the truth about AGL’s power games on energy prices. The ESB report states the closure of the Liddell power station in 2022 will put upward pressure on electricity prices in NSW. This is in direct contrast to AGL’s claims that their plan to close Liddell will deliver lower prices.  And with at least three genuine offers from other energy operators to buy Liddell rejected by AGL, it shows why many are cynical of AGL’s real motives.


Meanwhile, other countries are taking action, including developed economies like Japan. Recently the Japanese Government confirmed their latest five year energy plan. Their plan locks in their future energy security needs with new technology, low-emissions coal-fired power stations as well as integrating more renewable energy sources into their grid. And like so many other nations in our region, they’re using NSW coal to power these new power plants.

 

It’s yet another example of how a sensible and balanced approach to energy policy can deliver outcomes that most people can support. It’s also and a reminder of just what the energy policy extremists and zealots have cost us here in NSW.

 

Stephen Galilee

CEO, NSW Minerals Council

 

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