MUNGO MACCALUM. ACCC Report ignites squabbling.

Jul 17, 2018

Just when you might have thought you were getting a grip on the tin full of worms masquerading as the government’s energy policy,  along comes yet another authoritative report.

This one’s from Rod Sims of the Australian Competition and Consumer Commission, and, like almost all its predecessors, has a simple solution to most of the problems: up to 25 per cent off wholesale power prices almost immediately.

There’s just one catch: like almost all its predecessors, the ACCC report requires endorsement from a lot of very fractious people, and the relatively few who have read it (still fewer of whom understand it) have already started squabbling, while the rest have never stopped: they are not going to let the facts spoil a good story.

Most of what Sims recommends involving ending, or at least limiting, some of the more outrageous rip-offs from the energy companies, the generators, the wholesalers and the retailers, all of whom have done very nicely under the current system. Apart from asking why the hell that wasn’t done years ago, the public will no doubt applaud – if and when anything actually happens.

But the ACCC idea that has caused the most angst is the suggestion that the government should underwrite a long-term floor price in return for new players – not the old, discredited providers – offering to fund and install new “despatchable” generators to ensure supply and price.

Sims did not say it, but for the drowning miners of the far right that meant coal – and, like drowning cave dwellers, they grasped eagerly at the  prospect, apparently aware that clean coal will float while dirty coal often sinks.

And perhaps also aware that no sane entrepreneur would fund new coal-fired powered stations even if  generously bribed, the Nationals and the Liberals in the misnamed Monash Forum renewed their demands that Malcolm Turnbull get out there and fund a couple himself – not from his own money, although that would do, but from taxpayer funds. This is almost certainly not going to happen – but only almost, because Turnbull and his harassed minister, Josh Frydenberg, are desperate to get the energy issue settled one way or another before the summer break.

And far from helping them find consensus, the ACCC report has actually complicated things further. The two Energiser bunnies had decided on their National Energy Guarantee, a fourth-rate compromise no one really likes, but could just possibly be massaged through the conflicting interests of states, party rooms and parliaments.

Some of the government’s spruikers are optimistic that the fix will hold, if only through attrition. After who knows how many iterations of energy policy announced in triumph and discarded in ignominy, at least those one sounds a little more likely: National Energy Guarantee, there’s a three word slogan to cling to. Surely this can provide certainty to the market, the consumers and perhaps even the environment?

Well, sorry: as we have seen so often, legislating for consensus may provide a temporary sugar hit, but is seldom a long tern solution. For Tony Abbott and his rump, it is not supposed to be: for him the answer is not just coal, but the disruption it can engender, and energy has proved to be a very fertile field on which to wage his war.

The states and territories are divided and unsatisfied, and although they may submit out of sheer exhaustion, they will continue to find loopholes to exploit their own agendas. Bill Shorten, assuming he reads the ACCC report – or even of he doesn’t – will continue to exploit the government’s divisions. And the Greens and their allies will, as always, want more renewables and absolutely no new coal.

In this context Turnbull and Frydenberg will have to decide whether to stick with the already heavily amended NEG – already vastly less efficient and economical than an emissions trading scheme, or even the compromise proposed by the chief scientist Alan Finkel – or tweak it in line with some of the recommendations from Sims’s report.

This, of course, will be seen as yet more indecision, yet more dithering – but it needs to go to COAG next month, before finally emerging in the party room, and then presumably the parliament, in the last few weeks of the sitting year. And that’s where the real acrimony will begin.

Turnbull is very keen on what he calls engineering and economics as the basis of his energy policy. But engineering is grounded in science, and economics at least pretends to. The NEG is not – it is all about politics.

The Abbott mob simply reject the science of climate change – if they bother about it at all they find fringe dwellers to cherry pick the results that suit them. This is hardly a conservative position, but it is an immovable one: climate change is, in a very real sense, against their religion.

Turnbull will not go that far; he insists the Paris agreements will stand and that emissions reduction has to be part of the NEG parcel. But while he accepts the theory of climate change, he refuses to face the consequences: serious action to ameliorate it. Instead, he temporises, procrastinates and in the end capitulates.

And the only guarantee in the NEG is that it will solve very little. There may be a few less blackouts, some prices may eventually fall – marginally. But  the climate wars, having been subsumed into the interminable culture wars which the right invented and now escalates at every opportunity, will continue unless Turnbull either develops the gumption to stand up to his Neanderthals or surrenders entirely to them.

The alternative, it appears, is yet another inquiry – the big one, a Royal Commission. As always, there is support for going nuclear, and given the precedents in industrial relations and child abuse, not to mention (and Turnbull would much prefer not to mention them) the banks, a royal commission action would certainly unearth a few convenient malefactors.

But as Sims has pointed out, we already know what the problems are, now it’s time for the answers. Turnbull may finally  acknowledge the need for real action.  Or he may just declare victory and move on, the traditional solution to an insoluble dilemma.

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