Hewson's View: Negligence on energy will leave a debt for our children | September 22

It is almost impossible to understand how governments, both federal and state, have failed to develop and implement an effective energy policy. The bottom line is that we now have a power crisis, with consumers struggling with rapidly increasing electricity and gas prices. This represents a very significant challenge for many households when their wages are flat lining, and for many industries that were built on the expectation of “cheap power”.

Unfortunately, our politicians have spent their time scoring political points on each other, and blame-shifting, rather than solving the problem. This negligence is very difficult for most of us to understand and accept, and I have no doubt that it will be a dominant issue in coming elections.

Our politicians have left themselves exposed to the vagaries of the weather next summer. A really hot day could bring the system to its knees, with black outs, and further increases in electricity prices.

The challenge is clear. We need to make a transition to a low carbon society. We committed to begin this process by signing up to the Paris Accord, along with about 195 other countries, where we committed to reduce our emissions by 26-28 percent by 2030.

Fundamental to this transition is a move from coal-fired electricity to renewables. This should be easy for Australia as we have an abundance of sunshine and wind, and the technologies to convert these to base load power at an affordable price. The only ingredient lacking is leadership.

However, rather than accept the realities of the challenge, and set a clear, certain path for this transition, and one where financiers would have the confidence to invest in the new renewables projects, our politicians have deliberately confused the issue, with exaggerated claims and misinformation, sometimes promising more hydro, or more coal-fired power, or renewables, or whatever suits the occasion, or audience.

The absurdity of this political process was reached recently when the Government decided to “shirt front” AGL over its decision to close its Liddell coal-fired Hunter power plant in 2022. Again not offering any sensible and deliverable solutions, just attempting to score more points, and to shift blame.

ENERGY DEBATE: The Liddell Power Station debacle highlights the government's inability to deliver solutions for the power crisis. Photo: AAP Image/Dan Himbrechts.

ENERGY DEBATE: The Liddell Power Station debacle highlights the government's inability to deliver solutions for the power crisis. Photo: AAP Image/Dan Himbrechts.

The situation has been left to drift for so long now that there are no silver bullets” to provide an early reduction in power prices. Apart from the imperatives of the climate commitments, governments have known that ageing coal-fired power plants would close, yet they did nothing in anticipation of those closures – no forward planning, just let them close, and then try to blame anybody else.

Hazelwood in Victoria, for example, accounting for over 20 percent of Victoria’s electricity supply, and a fundamentally significant employer in the La Trobe Valley, was just closed with zero contingency planning, now leaving households and businesses exposed to risk of a power crisis this summer. Not only was Hazelwood significant to Victoria, but it was also an important back up, via the interconnectors, to Tasmania, South Australia, and New South Wales.

Expect voters to have the last word on this at the coming state and the next federal election. While our pollies love to assure us that they are in the game to hopefully benefit their children and grandchildren, their negligence on energy, as with budget repair, housing affordability, etc is intergenerational theft, leaving these issues for future generations to solve.

 – John Hewson


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