Analysis paralysis over the clean energy target has proved disastrous

Analysis paralysis over the clean energy target has proved disastrous

With any hope of a rational and sustainable Australian energy policy debate receding fast, the likelihood for a coherent plan to solve the country's energy woes appears is also becoming increasingly uncertain.

Unless some form of bipartisan agreement can be reached on a clear cut policy that allows power generators and retailers to plan for the future there is little doubt power prices will continue to skyrocket. Given the divisions within the Coalition, let alone the chances of the government working cooperatively with Labor on a plan, that appears optimistic, at best.


There is also a serious risk that as a result of the interminable dithering by our politicians there could soon be real issues with security of supply.

There is a clear policy vacuum when the best a Government can do is a desperate attempt to pressure a corporation into keeping an archaic, unreliable and costly coal powered fire station open well beyond the end of its useful life.


When this is followed by Wednesday's bizarre offer to bribe consumers, with their own tax dollars no less, to cut their power consumption it's obvious that desperation is setting in.

On the one hand Coalition MPs are saying the push to scrap the Clean Energy Target subsidy on renewables will be a winner at the next election.

They claim the CET, and the associated subsidy, is not needed as the cost of renewables is falling more rapidly than expected. Its retention would only add unnecessarily to the price of electricity to the consumer.

Labor, on the other hand, has reaffirmed its commitment to the CET, a key recommendation from the Finkel review, with Bill Shorten saying the looming Coalition backflip is proof Tony Abbott, not Malcolm Turnbull, is calling the shots.

Mr Shorten and his State and Territory colleagues appear to be on the same page as key players in the energy industry who say a CET would deliver certainty and encourage co-ordinated and strategic investment.

"Without an overarching policy mechanism (ie a CET) investment is less co-ordinated and timely than it otherwise might be," Origin Energy chief executive, Frank Calabria, said on Tuesday. "It is also likely to come at a higher cost - a cost ultimately borne by energy users."

These remarks endorse much of what has already been said by chief scientist, Dr Ian Finkel, and are also in line with views expressed by Business Council of Australia president, Grant King.

Australia cannot afford for our politicians to waste another year kicking this can down the road.

The time has come, as Dr Finkel said on Monday, "to take the red pill" in the form of a CET and begin Australia's orderly transition to a cleaner energy market.

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