Energy Minister Chris Bowen has backed new powers allowing states to mandate the extension of retiring coal-and-gas-fired power plants, sparking Coalition criticism that Labor is being “dishonest” about longer-term reliance on thermal generation under its energy transition plan.
Ahead of Peter Dutton releasing his long-awaited nuclear costings, The Australian can reveal federal, state and territory energy ministers ticked off on “initial rules” for an Orderly Exit Management Framework, giving states powers to delay closure of coal and gas plants in order to keep the lights on.
The OEMF, first proposed under the Morrison government and agreed to by ministers last year, includes provisions for governments to “enter voluntary ¬negotiations” with a generator to change its closing date and mandate the extension of retiring coal or gas-fired generators.
A communique released following an Energy and Climate Change Ministerial Council meeting in Adelaide last Friday said: “For jurisdictions that opt in, the OEMF will provide an important additional capability to better manage the retirement of thermal generation.”
Amid concerns over blackouts and energy reliability, the NSW and Victorian Labor governments have already intervened to push out closure dates for the Eraring, Yallourn and Loy Yang coal power stations.
Under the OEMF, if coal or gas-fired generator closure dates are brought forward and are deemed to have a negative impact on energy supply, governments can enter voluntary negotiations and strike agreements with generators to keep them open longer.
As a last resort, ministers can “mandate the temporary extension of the closing date of a retiring coal or gas-fired generator to ensure reliable supply and keep the lights on. Once the shortfall is filled, the power station is closed permanently”.
Debate over the future of coal and gas in the grid comes amid expectations the Opposition Leader will release his nuclear energy costings on Friday. The Coalition expenditure review committee was expected to rubberstamp the plan on Thursday.
Mr Bowen, who has attacked Mr Dutton for failing to release the costings, on Wednesday said that “unlike the Liberal Party, which oversaw a disorderly transition, we believe in having prudent measures in place to help manage a complex transition”.
“Angus Taylor heard about the closure of Eraring on the radio and the rapid closure of Hazelwood caused economic havoc in Gippsland. We believe in a more orderly, better managed approach,” the Climate Change and Energy Minister told The Australian.
Mr Bowen, who previously said he doesn’t want to see coal close a day sooner or later than it needs to, also conceded the government has a “lot more to do” in lifting renewable energy in the grid from 42 per cent to Labor’s target of 82 per cent by 2030.
As the Coalition ramps up attacks over Anthony Albanese’s broken promise to cut power bills by $275, Mr Dutton told The Australian the government’s energy policy is “wrecking our economy”.
“Electricity costs are the highest in the world and now we are likely to have blackouts. Higher food, groceries, and cost-of-living costs are due to Labor’s disastrous energy policy,” Mr Dutton said.
South Australian Energy Minister Tom Koutsantonis last month said the new OEMF rules minimised the risks of ¬reliability or system security shortfalls if coal-and-gas-fired generation was prematurely removed.
“Existing mechanisms in the National Electricity Law and Rules, such as market pricing and settings, including the Market Price Cap and the Retailer Reliability Obligation, may not be sufficient to address all potential risks associated with the early closure of a thermal generator,” he said.
“As a result, there is a need for a mechanism to ensure the potential early exit of thermal generation does not adversely impact on reliability and system security needs.”
The Coalition has questioned Australian Energy Market Operator targets released last year predicting 90 per cent of the current 21GW of coal ¬capacity will be retired by 2034-35, and that all coal will be gone by 2038.
Opposition climate change and energy spokesman Ted O’Brien said OEMF “exposes Labor’s dishonesty and tricky ‘extend and pretend’ strategy”.
“Labor claims to be closing coal early, but in truth they are extending their reliance on coal for years to come. They are trying to pull the wool over the eyes of Australians.”