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Green Aussie PM Caves, Coal and Gas Subsidy – Is It Up With That?


Essay by Eric Worrall

Australia has adopted the worst energy policy of both worlds, in which both renewable energy and fossil fuel suppliers will receive generous subsidies to maintain their services. .

‘Stakes never go higher’: energy board unveils capacity market plan

The Energy Security Commission says fossil fuel generators may need to pay to stay in business

Peter Hannam Monday, June 20, 2022 03.30 AEST

Coal and gas power plants can be paid to stay in business to enhance the stability of the main grid and attract enough capital to build 50 times the equivalent of the Snowy Hydro plan. originally in 2050, according to a high-level design paper released by Energy Security Department.

Fossil fuel generators will be required even as Australia continues to decarbonize the power sector, the paper reported on Monday.

The ESB report advocates payments not only to provide electricity but to sustain this capacity, as one of the most viable options for reforming the faltering energy market beyond 2025.

It also recommended that countries be able to choose technologies that align with their carbon-cutting ambitions, to assuage the anticipated opposition from some regions to the inclusion of fossil fuel plants. into a new capacity market. What is urgent, however, will be to improve investor certainty and the incentives to finance a major market reshuffle.

“Well designed, the power mechanism will enable a faster, less risky and orderly transition to a net zero emission energy system,” the paper argues.

Read more: https://www.theguardian.com/australia-news/2022/jun/20/stakes-osystem-higher-energy-board-releases-capacity-market-blueprint

On the one hand, providing this subsidy hopefully reduces the risk of blackouts. The government is effectively paying directly for the maintenance needed to keep fossil fuel power plants running.

But providing this subsidy is a commercial disaster, in terms of cost to taxpayers. Every supplier of energy, fossil fuel or renewable energy, will have their hand.

All could have been very different. There was a time when Australia had a technology-agnostic electricity market in which suppliers competed on price, rather than jokingly for distribution. All politicians need to do to revive this low-cost market is provide a credible bipartisan pledge that they will no longer play their favorite games.

But our politicians have chosen to intervene and advocate for renewable energy.

If renewables had worked, if they had been a viable alternative to fossil fuels, our politicians could have avoided their interference. In a few short years, renewables will replace fossil fuels, and people will settle into new lives.

But renewables don’t work – in the near future, Australia will require reliable, variable fossil fuel backup to prevent power outages, when the wind stops blowing and sunlight is blocked by clouds.

Fossil fuel suppliers have stepped in, and have no incentive to show restraint in their demands for government payments to continue operations.

Every Australian will pay and pay dearly for perpetuating the political illusion that renewables can add value to our grid.



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