The Greens are attempting to warn Labor off doing a deal with the Turnbull government on a new clean energy target, saying a Finkel handshake could trigger a “valley of death” for short-term investment in renewables, and lock in coal, rather than stranding it.
With parliament due to resume on Monday, and with the Turnbull government inching closer to finally resolving and outlining its energy policy, the Greens climate change spokesman, Adam Bandt, will bring forward a bill to prolong and expand the existing renewable energy target scheme.
While the Bandt bill won’t win parliamentary support, in political terms, it is a clear shot across Labor’s bow as the opposition begins to assess whether or not to sign on to the clean energy target – in the event the Coalition overcomes its internal brawl, and proposes one.
A range of industry stakeholders have pressured both major parties to use the framework of the Finkel review of the national electricity market to come to terms on energy policy, and end the decade long politically toxic climate wars.
But Bandt will say on Monday Labor needs to be careful not to be suckered into bipartisanship for its own sake, and he will warn that it will be difficult for Labor to do what it has signalled an inclination to do – increase the ambition of the scheme if it wins the next federal election.
“If Labor and Liberal agree on a clean energy target that includes coal but don’t include any mechanism to start closing coal-fired generators, it may well create a short-term valley of death for renewables,” Bandt was due to say on Monday.
The government’s existing renewable energy target peaks in 2020, but continues through to 2030.
Alan Finkel, the chief scientist, recommended in his review of the national electricity market that government adopt a clean energy target from 2020, to continue in perpetuity.
Bandt will argue that any new investments built between now and 2020 will have less certainty than investments built in the new scheme after 2020.
He will argue it will be difficult for any incoming Labor government to ramp up the ambition of any clean energy target it has legislated with the Coalition, because there will be industry pressure to maintain the status quo, and the states will be involved through the Council of Australian Governments.
He will say a bipartisan deal could create the conditions for the construction of a new coal-fired plant during the “valley of death” when renewable investment pauses between the cessation of the existing renewable energy target, and the beginning of the clean energy target.
“Once built, the pressure will be immense on future governments not to adjust the CET or withdraw support so as to devalue these plants,” Bandt will tell parliament.
“A Labor/Liberal CET deal that includes coal is a recipe for hobbling renewables and subsidising the new build of what would otherwise be stranded fossil fuel assets.”
The government is due to get advice from the Australian Energy Market Operatorabout Australia’s requirements for dispatchable power at a time when ageing coal-fired generators are starting to leave the system.
The advice from AEMO is a critical input for the government in determining the final scope of its energy policy. There has been talk over the past few weeks that the Turnbull government could seek to extend the life of the Liddell coal-fired power station, which is due to close in 2022, to keep more base load in the system.
It remains unclear whether the government can get a clean energy target through the Coalition party room, and the former prime minister, Tony Abbott, has been positioning himself for a confrontation once the policy moves into the decisive phase.
With the Finkel policy still unresolved, and with high power prices creating ongoing political angst, this week, the government will push ahead with legislation to abolish limited merits review – a system of regulation that has the practical effect of inflating power prices for consumers.
The jockeying over energy policy coincides with the resumption of federal parliament on Monday for a fortnight.
The coming parliamentary fortnight will be choppy for the Turnbull government, with continuing skirmishing over MPs caught up in the citizenship fiasco.
The Nationals deputy leader Fiona Nash, and the Senate crossbench king maker, Nick Xenophon, will be referred to the high court this week to have their eligibility determined.
The high court will also this week hear a legal challenge to the postal survey on same sex marriage.
The government is also expected to press ahead with its media reform bill which stalled during the last sitting fortnight when the NXT signalled it couldn’t accept the deal the government had offered.
The sticking point has been tax incentives to improve the viability of small publishers. Xenophon has come back to the government with a revised offer, but it is unclear whether the government will accept it.