TONY MAHER. Energy future debate needs to put people first

Climate, Economy

TONY MAHER. Energy future debate needs to put people first

Jul 4, 2017

Without bipartisan support for the key planks of energy policy, we will continue to have electricity shortages, higher than necessary prices and investment decisions being made by governments based on populism. Workers shouldn’t be used as a pawn in a political game by politicians. Workers should be centre stage – changes to the energy system should make sure workers and their communities don’t continue to bear a disproportionate share of the burden of this unholy mess.

In March 2017, French energy giant Engie shut down Hazelwood power station, an asset which has supplied power and jobs to Victorians for generations.

One thousand workers were victims of short-sighted companies who have spent the past twenty years since privatisation taking profit while failing to invest; and short-sighted governments who have looked the other way.

Twenty years ago we had an efficient, profitable and publicly owned electricity system. We employed hundreds of professionals who successfully planned future investment in generation to meet the needs of our manufacturers and growing population.

Across the country, successive governments – some Coalition, some Labor – sold these vital public assets in a dash for cash. We were told we’d get a more efficient operation to the benefit of consumers with commitments to streamline operations – code for job cuts.

The job cuts in the power plants happened, but the promised benefits to consumers did not. The sales, billing and middle management workforce exploded, causing major declines in industry productivity – the exact opposite of what privatisation advocates extolled. Electricity prices have increased so rapidly it’s made our heads spin – they’ve doubled even after you take out the impact of inflation.

In the meantime, the private owners of the assets have failed to look to the future, failed to invest in technology and, now the electricity industry is in crisis. The cost of these failures is borne by both consumers and workers in the energy industry.

The energy companies have announced that they will all close all their taxpayer built power stations as they reach their expected design life. Some plants will close earlier than that because of the cost of maintenance and upgrades. The same companies say they will not build any more conventional coal fired power stations. Neither will any investor.

In gas-fired power, investment has also dried up because prices for gas increased as soon as we built those LNG export terminals on the east coast. Industry and state government mishandling of the coal seam gas issue has resulted in uncertainty of gas supply.

The capacity of large-scale battery storage to back up renewable power at an affordable cost is also ambiguous – at the very least there is uncertainty about when it becomes affordable at large scale.

There’s a big difference in the cost of storage to deal with a 30 minute peak versus days of wind and solar shortages.

The Prime Minister originally proposed spending taxpayers’ money on near zero emission coal fired power with carbon capture and storage. The problem is that he is at least a decade too late.

Our union started advocating investment in carbon capture and storage two decades ago. We thought governments had listened when the Rudd Government put $2 billion in with the CCS Flagship Fund and the created the Global CCS Institute.

The problem is that no project proposal got past the preliminary stages because the coal multinationals predictably refused to invest properly in the future, again.

The real problem facing Australia is how we get sufficient investment in new capacity to ensure an adequate supply while meeting emissions commitments. Investors are virtually on strike until government provides policy certainty for the medium to long term. Existing energy companies have no incentive to build spare capacity because they make the most money when supply is scarce.

We have a regulatory framework that has failed so badly that we had to have a wholesale external review of the system. The Finkel Review has come and gone without the Government dealing with it’s central recommendation of a Clean Energy Target.

So we have no appetite for private investment and a failed regulatory framework. In a debate about how to get to zero net emissions, the only thing we have ‘zero’ of is political agreement; and the only thing that is certain is more job losses and electricity price rises.

The Prime Minister knows this – without bipartisan support for stable long-term policies governing emissions, no significant new generation capacity of any kind will attract investors. Everything the PM wants to do on energy policy his party won’t let him. Everything they want him to do, he won’t.

The divide is so bitter that they would rather agree that the Federal Government increase it’s stake in the industry with public ownership of Snowy 2.0. They prefer ‘socialism’ to doing the bleeding obvious.

While the Federal Government positions itself for the next election, the final responsibility for electricity supply rests with state governments. Government ownership or strong state government intervention will be needed to put the public interest first.

In South Australia, the State Government has announced a major package of reforms that include a focus on gas-fired plant to secure a more adequate energy supply.

Meanwhile we’re getting on with redeployment schemes that ensure workers are not a policy afterthought.

In Victoria, we now have a ground-breaking Worker Transfer Scheme with the State Government, power station operators and workers through their unions coming together to ensure no-one is left behind with the Hazelwood closure.

Tony Maher is the CFMEU National President