Opposition leader Bill Shorten has accused the Coalition government of policy vandalism on energy, and committed to an emissions intensity scheme that he insists will deliver Labor’s target of 50 per cent renewables in the country’s electricity system by 2030.
In a landmark speech at the Bloomberg headquarters in Sydney on Thursday, Shorten said Australia should be the “energy capital of Asia”, echoing former government advisor Ross Garnaut’s pitch that the country should become a “renewable energy powerhouse.”
Shorten – in a hastily arranged speech designed to re-frame the energy debate and regain the initiative after losing focus and being outmanoeuvred in the past week – outlined why Australia should be focusing on wind, solar and storage technologies rather than a misnomer like “clean coal.”
Labor, it seems, is realising that – with the strong support of public opinion – its commitment to renewable energy should be a vote winner, and the means to deliver cleaner, cheaper and more reliable power.
That approach is being underpinned by the falling cost of solar, in particular, the emergence of battery storage, reports from the CSIRO and others that underpin the cost benefits of renewable energy, and the repeated failure of fossil fuel generation in critical events such as storms and heatwaves.
And, Labor hopes, its commitment to renewables will draw a clear line of difference between it and the Coalition, which Shorten said was “betting the bank on dirty, unaffordable technology.”
“Gambling on our energy future with clean coal is like punting on last year’s grand final today and picking the losing team,” Shorten said of Coalition’s commitment to building new coal-fired power stations.
“In the renewable jobs and investment race – Australia has got a dream barrier draw. We are the world’s sunniest continent, one of the windiest places on earth and our universities, research centres and firms keep producing leaders in the field.”
Shorten was savage on the Coalition’s policy position, its support of “clean coal”, its opportunism on blackouts, its “policy vandalism” and the apparent complete about-face by Malcolm Turnbull on climate and clean energy policies.
He insisted the 50 per cent renewables target – which he admitted had been variously described as a “goal, target”, “objective” or “aspiration” – is “what we want Australia to achieve” and “2030 is when we want to get there.”
He also insisted that the $48 billion capital cost estimate by Bloomberg New Energy Finance to reach that figure was not a cost, but an “investment” that would create new industries and jobs.
It is understood that the speech was arranged following confusion over Labor’s policy last week, after a series of ill-fated interviews, and an internal decision to distinguish its policies from the Coalition by focusing on the technology and economics, as well as the climate issue.
This is what Shorten did well in his speech, pointing to the tumbling of more than 400 climate records, the need to reach the Paris climate targets, the lack of investment because of policy uncertainty, the benefits of investing in wind and solar, and the need to amend energy market rules to ensure renewables can be integrated.
“We didn’t need the blackouts to know that policies need to be changed,” he said.
The big question, however, is how a Labor government would achieve its 50 per cent renewable energy target by 2030, given that it is relying on an emissions intensity scheme as its primary policy mechanism – and Shorten made clear that the target would not be legislated.
That means the effective end of the renewable energy target mechanism in 2020, and the reliance on an EIS and possibly other mechanisms, such as state-based targets or reverse auctions.
Modelling done on behalf of the Australian Energy Markets Commission (by Frontier Economics) and the Climate Change Authority (Jacobs) indicates an EIS would deliver little in the way of new renewables by 2030, and maybe around 30 per cent at best.
Shorten mentioned the need to use ARENA and the CEFC to continue investment in new technologies, and to change the focus of the National Energy Market rules (at least so it takes environment and climate into account).
But the discussion among many of the energy experts immediately after the speech at Bloomberg was focused on what more would be needed in the way of policies.
These discussions focused on whether a change of market rules would be enough; would an auctions scheme be needed, and what would become of state-based targets – and whether these would provide the investment drive to reach that target.
Shorten admitted in his speech that “an EIS will inevitably make gas a more attractive investment.” Indeed, in the Frontier and Jacobs modelling, gas takes a dominant share of new investment. But the question must also be where that gas would come from, and what it would mean for coal seam gas policies.
Shorten did not take questions at the event, although RenewEconomy did manage to grab him for one question as he headed to the escalator: Was he convinced, we asked him, that an EIS was enough to deliver that target, given the available modelling didn’t show it.
“We are not saying everything should be an EIS. Obviously there are other developments we can advocate … we are confident that the modelling shows that we are on the right track.”
That, most experts recognise, is a work in progress, and Labor admits that it will need to work more on the design of an EIS to ensure it achieves the right long-term outcomes.
But the experts described the overall thrust of the speech as overwhelmingly positive, given that it had outlined the environmental, economic and investment benefits of renewable energy.
On the Coalition, Shorten accused the party, and prime minister Malcolm Turnbull in particular, of choosing “vandalism over pragmatism” and committing only to scare campaigns.
“How is it that a man who used to pride himself on being the renaissance man of climate change, is now out there demonising renewables and talking-up coal?” Shorten said.
“The Prime Minister personally appreciates the advantage of renewable energy, which is why it’s so disappointing to watch him attacking the renewable energy industry and hurting jobs.
“This frightens away investors and it does nothing to guarantee Australians can keep the lights on – not just tomorrow, but ten years’ from now.”
The full text of the speech is available here. It’s worth a read.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.