Underwriting New Generation Investment Program “Unconstitutional”?

Federal Energy Minister Angus Taylor

Is Minister Taylor about to miss another energy policy delivery? | Image via Facebook

Federal Energy Minister Angus Taylor apparently lacks constitutional authority over electricity and authority to fund projects under the Underwriting New Generation Investment Program in its current form.

The Underwriting New Generation Investments program is part of the Morrison Government’s hastily cobbled together plan to deliver “affordable, reliable 24/7 power”. As well as new projects, it is considering those seeking to extend the lives of existing coal-fired clunkers.

Early this month it was revealed 66 submissions were received for the program, with ten involving power station projects running entirely or mostly on coal.

However, legal advice provided to The Australia Institute (TAI) Climate & Energy Program indicates the initiative is open to a High Court Challenge without new or amended legislation. The Morrison Government has zero hope of achieving this before the May election.

“This is another blow to the Federal Government, that their signature program to fund electricity is destined for the shelf – along with the rest of the Government’s energy policies,”  said TAI’s Richie Merzian.  “Almost every coal power station in this country was built with Government and taxpayer support and with the demise of the Government’s underwriting program, we may never see another built with taxpayer dollars again.”

Mr. Merzian said the only way for the program to proceed is through investing in renewables through the Clean Energy Finance Corporation.

Coal power is now stuck between a rock and a hard place as investors have little appetite for funding coal fired electricity generation in Australia. Westpac’s head of infrastructure and utilities, David Scrivener, recently said new coal-fired generation projects had little hope of proceeding without taxpayer funding involved.

The Answer Is Renewables Dammit

But there’s good news – flying in the face of what many politicians seem to believe, the cost of new renewable energy generation is less than that of new coal – and will soon be cheaper than existing coal. This includes enough energy storage or dispatchable generation to meet demand more reliably than coal fired power generation can.

The Federal Government’s energy policy may be an utter mess, but the Clean Energy Council has its back – it has released a suite of policy recommendations the Morrison Government can take to the election. These include timely investment in Australia’s electricity transmission network, which it says is crucial for the transition to our nation’s renewable energy future.

About Michael Bloch

Michael caught the solar power bug after purchasing components to cobble together a small off-grid PV system in 2008. He's been reporting on Australian and international solar energy news ever since.

Comments

  1. Ronald Brakels says:

    Has anyone actually seen the list of 66 submissions? I read the list was released but no one has been able to turn it up. It appears to be a secret.

  2. Roger Reitze says:

    How are renewables to handle base load?

    • Ronald Brakels says:

      If the output of renewable generators isn’t enough to meet baseload demand then a dispatchable source of power is used to make up the difference. For example, in South Australia today baseload demand occurred at about 2:30 pm and was 931 megawatts. Since the wholesale price of electricity was higher in Victoria at that time the state wouldn’t have been importing any electricity so demand renewables didn’t meet would have come from gas.

  3. Alistair Daley says:

    Would somebody please tell me how we store enough renewable energy to make coal redundant. This is the only question that matters as we all want it to happen.

    It is no use making these statements if you cannot make a case that stands up.

    The current load on the NEM is 36-37,000MW and rising. By 2030 it will be approx. 40,000MW. Labor plans to meet half this load with renewables by building 1,500-2,000MW per year for each year of the 2020’s.

    So there are a few questions here. What about the 50% that is not renewables? If don’t do something in this space we are out of power. The aging coal fired power fleet is already struggling to me its requirements.

    How does Labor build storage of 20,000MW of renewables in 10 years if they can do it at all? I think they are off with the fairies. They will inherit Snowy 2.0 and get 2,000MW but that won’t come on line until 2024, 7 years after it was first thought of. Labor expects us to believe they can build one of these each year for 10 years. I think their policy is designed to win votes at the next Election and nothing more than that.

    • Ronald Brakels says:

      There is no need for any renewable energy to be stored for coal to be made redundant. Around 50% of the electricity consumed in South Australia is generated from renewable sources with a comparatively tiny amount of storage.

      In practice storage will be built because it will often be the best option.

      As for being able to build enough renewable capacity, Australia would have to slow the rate it is currently adding renewable capacity for electricity production to be 50% renewable by 2030.

    • Geoff Miell says:

      Alistair Daley’
      You ask:

      “Would somebody please tell me how we store enough renewable energy to make coal redundant. This is the only question that matters as we all want it to happen.”

      I suggest you (and anyone else who would like to know) view the YouTube video of ANU Professor Andrew Blakers, who delivered the keynote speech ‘100% Renewable Energy Futures’ at the 2017 CURF annual forum at the University of Canberra, on 30 Nov 2017.
      See: https://www.youtube.com/watch?v=y1IC6TiNDRc

      Also look at the report titled “Comparison of Dispatchable Renewable Electricity Options: Technologies for an orderly transition”, by Keith Lovegrove et al., prepared for ARENA by ITP Thermal Pty Ltd, Oct 2018.
      See: https://arena.gov.au/assets/2018/10/Comparison-Of-Dispatchable-Renewable-Electricity-Options-ITP-et-al-for-ARENA-2018.pdf

      I think there’s a compelling case for transitioning Australia’s electricity generation sector to 100% renewables. See my Submission (#09) to the Australian Senate Select Committee into Fair Dinkum Power.
      See: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Fair_Dinkum_Power/FairDinkumPower/Submissions

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