“CoalKeeper is dead,” Queensland Minister for Energy Mick de Brenni said after yesterday’s energy ministers’ meeting. “Angus Taylor and Scott Morrison’s CoalKeeper is dead.”
To which one might respond, best to drive a stake through its heart and decapitate it just to make sure.
CoalKeeper — or a capacity mechanism, to give it its formal name — was devised by Taylor and his appointed bureaucrats as a way to prop up unreliable and unviable coal-fired power stations, with the cost to be borne via higher energy bills, under the pretext of ensuring reliability in a system with a growing level of renewable power.
Despite opposition from the states — led particularly by Victoria — Taylor clung grimly to this lifeline for fossil fuels, even as owners of old, expensive coal-fired power stations began bringing forward their closure and openly ignoring him. By the time the 2021 election came round, a humiliated Taylor was lashing out wildly at power companies and threatening to force them to keep their coal-fired power stations running even if the power wasn’t needed.
The new government briefly flirted with allowing gas in the mechanism after it entered government, but in its final form announced yesterday by Chris Bowen, the “Capacity Investment Scheme” (CIS) will be renewables-only dispatchable power. It will operate under an auction-and-underwrite process similar to that already established by Matt Kean in NSW, enabling existing NSW tender processes, which are already underway, to slot into the new scheme and receive Commonwealth funding.
As Reneweconomy’s Giles Parkinson cannily noted, yesterday’s agreement locks NSW in even if NSW Labor wins the March state election and wants to backslide from Kean’s leadership on decarbonisation — perhaps under pressure from fossil fuel unions like the AWU and the mining division of the CFMMEU.
It can also be seen as the end of the first stage of repairing the colossal damage a near-decade of denialism and do-nothingism under the federal Coalition did to Australia’s energy infrastructure (punctuated all-too-briefly by Malcolm Turnbull’s unsuccessful efforts to make progress).
Labor’s Rewiring the Nation infrastructure spending and the CIS finally bring the Commonwealth back as a credible player and funding source to the task of overhauling transmission infrastructure and accelerating renewables investment.
That’s separate from the more immediate political issue of trying to curb energy price inflation through price caps on gas and coal that is being thrashed out between first ministers today. Significantly, it’s NSW that is relaxed about foregoing coal royalties, but it needs help to reduce prices ahead of the March state election.
It’s Queensland that is holding out so far, not just because of its reliance on coal royalties (which it increased recently to reflect the windfall profits coal companies are enjoying) but because it owns and operates its own coal-fired power stations.
Surging energy prices in Queensland, where the state government owns the majority of coal-fired plants, are a standing rebuke to all those — including Victorian Premier Dan Andrews — who have connected privatisation with high prices, with the Queensland government preferring to directly subsidise consumers rather than use its ownership of power generators to curb prices rises. The Queensland government has committed to shut its coal-fired generators by 2035, but for now remains directly locked into fossil fuels in a way no other Australian government is.
CoalKeeper may be dead, and we should dance on its grave, but Queensland is still keeping coal in its own way.
