An energy policy for everyone

The upcoming federal election will see the current government heavily criticised in many quarter for not having a coherent (or even an incoherent) energy policy. The consistency of this criticism makes the accusation self evidently true and allows a level of self flagellation about our relative emissions performance that transcends arguments about statistical significance or the fact that no-one is really moving the needle all that much in terms of total emissions.

Given the government’s inability to provide what everyone seems to regard as a no brainer, it is might be useful to consider what key stakeholders want to see in an energy policy and indeed what the role of an energy policy should actually be.

For many average voters an energy policy is probably more akin to a target – the Labor party has a 50% renewables target while the Greens have 100% renewables by 2030 that includes the added bonus of a ban on thermal coal exports. Opinion polls seem to indicate that the average punter likes to see these sort of aspirational goals – along with things like guaranteed lower power prices and complete supply reliability.

Other stakeholders will have more focussed expectations

For the utility industry an energy policy really means a government funded transition scheme – if they are expected to shutdown fully operational (albeit somewhat aging) coal and gas plants they need to be compensated for both the premature loss of these assets and the expenditure required to build new renewable generation complete with battery storage and distribution. Their ideal energy policy would be one that cements their role as the incumbent supplier of electricity and provides a pathway for future low risk investment and continued earnings growth.

New, potentially disruptive, entrants to the power generation industry don’t have to worry about stranded assets but they will be watching the growing public demand for major renewable investment. Patient entrepreneurs will be thinking that jumping in now could be premature – if the public’s appetite and desire for clean energy continues to grow and governments become more desperate for major investment in renewables plus batteries plus poles and wires there could be a better deal around the corner. In this case they want an energy policy that offers generous incentives and also favours disruption of the generation oligopoly

In both cases plenty for scope for self interest in public calls for urgent government action

In the meantime there is a steady stream of media reports that report plummeting prices for the latest generation of renewable technology (2). If these are to be believed then maybe Australia has made a wise choice to let the technology behind renewable generation mature. Australia has excellent wind and solar resources and when these are full exploited we should be hoping that is based on best available technology.

Without wishing to suggest that the current government has managed the decarbonisation debate other than poorly, it is likely that from both a technology and a national competitiveness perspective that we may have been accidently, well served by inaction. For this to be true, future actions would need to be based on learning what has worked / hasn’t worked in other countries and providing the incentives for the right technologies to the right people in a fashion that creates competition and protects those who will inevitably suffer when decarbonisation gets underway in earnest. We will need an energy policy soon enough but it may be to our good fortune to allow others to do the trial and error first. Our wind and sunshine is not going away and we may also find a use for our geological formations and ability to generate hydrogen