The Turnbull government is poised to unveil a new energy investment framework that will impose obligations on the electricity sector to reduce emissions consistent with the Paris agreement. It will also create new reliability obligations to ensure there’s enough dispatchable power in the system.
Cabinet, and the government’s backbench committee on environment and energy, considered the government’s new policy on Monday night before a party room debate slated for Tuesday morning.
Government sources have confirmed the Coalition will not adopt the clean energy target recommended by Australia’s chief scientist, Alan Finkel, in his review of the national electricity market.
The vociferous internal critics of Finkel’s proposal, led by the former prime minister Tony Abbott, have made it clear for months they will not accept any policy that contains new subsidies for renewable energy. The existing renewable energy target peaks in 2020 and will run out to 2030.
It is understood the new obligations for reliability and emissions reduction will be imposed as part of an overhaul of the national electricity market rules recommended by the Australian Energy Market Operator and the new Energy Security Board, established by the Council of Australian Governments to drive the recommendations of the Finkel review already endorsed by state and federal energy ministers.
While key details of the policy are not yet clear, government sources claim the required emissions reductions in electricity will be consistent with the Paris framework, and the new policy approach will have a more positive impact on power prices than the clean energy target, which Finkel said would lower energy prices compared with business as usual.
The government is also expected to keep the emissions reduction fund and it flagged the potential use of international permits to help meet Australia’s emissions targets at lowest cost in its review of the Direct Action policy, launched in March.
The government’s efforts to resolve its energy policy comes as the new Hlcarpenter.com Essential poll finds a clear majority of voters support the now dumped clean energy target to help drive the transition to low emissions power sources.
The new poll shows support for a clean energy target at 65%.
It also suggests Coalition conservatives who have campaigned against the Finkel proposal are out of step with the views of their own supporters.
While the total approval for the clean energy target is 65% in the new survey, 68% of Coalition voters in the sample of 1,845 voters said the government should implement a clean energy target.
And while Coalition conservatives have railed for months against subsidies for renewable energy – Australians are on a different page.
Australians are overwhelmingly supportive of incentives for low-emissions technologies, with 74% of the sample backing ongoing support for renewables, and 75% of Coalition supporters endorsing that view.
A majority of voters, including a slim majority of Coalition voters, also support Labor’s policy goal to source 50% of electricity from renewable sources by 2030 – a policy regularly attacked by the Coalition.
Labor’s policy was supported by 62% of the sample, and 52% of Coalition voters said they approved of it.
At the beginning of a critical week for the government on energy, voters are inclined to see the government in Canberra underperforming on a key issue, although they are not as frustrated with the Coalition as they were in February.
The Turnbull government is not doing enough to ensure affordable, reliable and clean energy for Australian households and businesses, according to 61% (down from 71% in February). Only 15% think it is doing enough, and 19% (up 5%) say they don’t know.
More than half (56%) of Coalition voters think there has not been enough action, and 22% think it is doing enough.
With Tony Abbott spending the past several months front running the government’s energy debate, and leading the opposition to the Finkel recommendation, 42% think the former prime minister should resign from parliament (down 1% from April), while 30% think he should stay in parliament in some capacity (down 2%).
Liberal/National voters were more likely to think Tony Abbott should stay in parliament (38%) than Labor voters (27%) and Greens voters (17%).
Labor is still in front in the new poll, leading the Coalition on the two-party preferred measure 52% to 48%, but that is an improvement on the government’s fortunes from a week ago, where Labor led 54% to 46%.
The major parties traded blows over energy in parliament on Monday, when Labor asked a series of questions about why the prime minister had given early public endorsement to the clean energy target when the government now intended to dump it.
Labor has signalled it is highly unlikely to support an energy policy which abandons the core Finkel recommendation but the shadow climate minister, Mark Butler said on Monday the opposition held out “some hope” that the government would produce something sensible.
A major business group, the Business Council of Australia, urged the ALP to “stop, pause, and look at the detail” before forming a position on the government’s plan, because stakeholders needed bipartisanship for investment certainty.
“The worst thing that could happen now is that we go into another round of never ever, pure politics or this won’t work or it’s not our scheme, so it’s not a good scheme,” said the BCA’s chief executive, Jennifer Westacott.
Westacott said it was “hugely important” for the government to set a trajectory for emissions reduction, and a establish a clear trigger, so businesses understood how emissions would be treated, because “if you’re trying to do a major project you want to price risk.”