'I am not sceptical about climate science': Energy Minister Angus Taylor hits back in new price pledge
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'I am not sceptical about climate science': Energy Minister Angus Taylor hits back in new price pledge

The Morrison government will outline a new "price-busting" pledge to drive down the cost of power, keeping a focus on coal and gas and taking a tougher approach towards renewable energy subsidies.

Energy Minister Angus Taylor will outline the new position on Thursday, along with a strident defence against accusations he is a "climate sceptic" who opposes wind farms and other renewables.

Energy Minister Angus Taylor with Prime Minister Scott Morrison.

Energy Minister Angus Taylor with Prime Minister Scott Morrison.Credit:Alex Ellinghausen

"I am not sceptical about climate science," Mr Taylor declared in a draft of his first speech as minister.

"But I am and have been for many years deeply sceptical of the economics of so many of the emissions reduction programs dreamed up by politicians, vested interests and technocrats around the world."

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The Coalition is trying to recover from last week's near-collapse of the National Energy Guarantee, when former prime minister Malcolm Turnbull dropped plans to legislate cuts to carbon emissions amid a backbench revolt that cost him his job.

Mr Taylor will focus on price and reliability and has made no assurances about pollution. Environmental groups have urged him to stick to the Coalition policy of cutting greenhouse gas emissions by 26 per cent by 2030 to meet Australia's commitments under the Paris accord.

The new approach puts energy providers on notice to expect heavy-handed rules to stop price increases, on top of existing powers already handed to the nation’s consumer watchdog.

In his speech, the new Liberal minister declares himself a "lover of the environment" and says he has seen the impact of climate change at his family's farm in southern NSW.

"But none of my concerns justify supporting expensive programs that deliver little else other than funnelling consumers’ hard-earned money into vested interests and result in increased prices and reduce reliability," Mr Taylor says.

He names Labor’s emissions trading scheme, the renewable energy target and the Labor scheme to install pink batts in ceilings as examples of intervention that passed higher costs on to consumers.

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"In good conscience, I simply can’t support the hard-earned wages of Australians being siphoned off into these sorts of schemes," he says.

The remarks are likely to infuriate those in the solar and wind sector who believe their renewable projects are thriving because they can undercut the price of coal and gas energy.

The Grattan Institute found in January this year that "green schemes" made up 16 per cent of the increase in power bills over the past decade, but noted they only comprised 6 per cent of the average bill, based on data from the Australian Competition and Consumer Commission.

The analysis found that network costs made up 42 per cent of the increase and retail margins made up 26 per cent of the increase over the decade.

Mr Taylor is seeking to open talks with big energy companies about the idea of offering financial guarantees from the Commonwealth to underwrite new power generation projects regardless of their technology.

"I see a strong role for commercially viable renewables, alongside continued focus on coal and gas," he says.

With the future of the NEG in doubt and a new cabinet yet to decide its stance on Paris and emission reductions, Mr Morrison is concentrating on ACCC measures to cut prices.

"I am going to be the Prime Minister for getting electricity prices down. Angus Taylor is the minister for getting electricity prices down and that is a core focus of my government, particularly in the early days," he said.

Opposition Leader Bill Shorten has also outlined tougher rules on electricity prices, adopted from ACCC recommendations and including a cap on prices in "default" electricity packages offered to all consumers.

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State agreement is expected to be needed to impose the tougher rules under either a Coalition or a Labor government.

"We need more price-busting initiatives," Mr Taylor will tell a small business summit in Sydney on Thursday.

"It would be marvellous if we could fix these problems by leaving the industry alone. But we are well past that point because the fundamental problem with the sector now is that it is propped up entirely by heavy-handed government intervention.

"Poorly conceived interventions in the past leave us no choice but to make interventions to get things back on track."

Mr Taylor likens the government’s challenge on power prices to the task it faced on border protection, where it promised to "stop the boats" with a simple goal.

"My goal, the goal of my department and the goal of the electricity sector must be simple and unambiguous – getting power prices down," he says.

The new minister argues that some of this has already been done by stopping some gas from being exported, limiting review rights for the big energy companies and committing to the ACCC plans for price regulation.