'Low expectations': Business loses hope in Coalition's climate credentials as eyes turn to Labor
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'Low expectations': Business loses hope in Coalition's climate credentials as eyes turn to Labor

Labor is under pressure to revive the Coalition government’s floundering national energy plan as business groups abandon hopes that the Morrison administration can end Australia's crippling climate wars.

New Energy Minister Angus Taylor on Tuesday spruiked his commitment to lowering electricity prices, saying his government would apply the same commitment to the task as it did in tackling illegal boat arrivals.

Labor is under pressure to revive the government's energy plan.

Labor is under pressure to revive the government's energy plan.

Photo: Bloomberg

“I will allow nothing to get between me and bringing down prices. No distraction, absolutely nothing,” he told 2GB's Alan Jones.

“We are going to have exactly the same focus on getting down electricity prices as Scott Morrison himself had in 2013 ... in stopping the boats."

The Morrison government’s decision to divorce electricity emissions reduction from its agenda and focus on prices leaves a policy vacuum that Labor is yet to fill.

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Labor is yet to fully reveal its climate change policies, nor confirmed whether it will seek to resurrect the National Energy Guarantee, which lies in ruins following the Liberal leadership spill.

Business sources told Fairfax Media that the plan, which was the subject of months of development and negotiation, remains Australia’s best bet to ending the political stand-off on energy policy.

"I will allow nothing to get between me and bringing down prices": New Energy Minister Angus Taylor.

"I will allow nothing to get between me and bringing down prices": New Energy Minister Angus Taylor.

Photo: Alex Ellinghausen

However it is understood the business sector has lost faith in the Morrison government's will to overcome its internal divisions and devise a credible emissions reduction policy - one that they say is badly needed to provide investment clarity.

“People have very low expectations of the remaining months of this government and nobody can know how this civil war or reformation inside the Liberal Party is going to go,” a source said.

Fairfax Media understands the Energy Security Board, which devised the National Energy Guarantee on behalf of the government, continues to work on the policy following the release last month of draft legislation on the reliability component of the plan.

Australian Industry Group principal national policy adviser Tennant Reed told Fairfax Media that the energy guarantee “remains a good model to build on”.

“Nationally we have to get our act together [on energy policy] and leadership from all quarters is going to be needed over coming months,” he said.

Mr Reed said Labor could “absolutely” take up the policy.

“It would be a sensible thing to do. They signalled some reservations but openness to that [policy] design previously,” he said.

“No doubt they could pursue tweaks to it that would meet their concerns, obviously they have a deeper [emissions reduction] target in mind, but that can be done.”

A spokesman for the Australian Energy Council, which represents major generators, said while the National Energy Guarantee was in limbo "we will continue to encourage the government and opposition to put a framework in place".

"Without it, the energy challenge won’t really be addressed or get any easier," he said.

Environment Victoria climate policy expert Erwin Jackson said ahead of a federal election, Labor must reveal how it plans to meet its 45 per cent national emissions reduction target.

“Labor has a chance to build on the work that has been done over the last few years and offer a real and sustainable policy solution.”

A spokeswoman for Labor’s climate change and energy spokesman Mark Butler said Labor was prepared to work with the government on the national energy guarantee, but "right now, no-one knows what the status of the [policy] is".

Meantime Mr Taylor told 2GB the government may force AGL to sell the Liddell power station, which is due to close in 2022.

“We will say to the big energy companies, if you’re not prepared to keep that reliable power in the system, then we’ll force you to divest it," he said.

Grattan Institute energy director Tony Wood said the forced divestment of Liddell is possible but it would be “a constitutional nightmare”.

“For the government to do this is possible but it would be a very difficult and not a trivial process, and they would have to provide an adequate compensation for doing so,” Mr Wood said.

“This sounds like it would be constitutional lawyers at 30 paces. It’s pretty loud chest thumping, that’s for sure.”

Australian Energy Council chief executive Sarah McNamara said “the possibility of forced divestiture of assets is a heavy handed intervention that would have a negative impact on investment confidence. We note that the ACCC described it as an extreme measure and actually ruled it out in its final report on the electricity market.”

AGL declined to comment on Mr Taylor’s statements.

However, when asked last week if AGL had changed its position on closing Liddell after the departure of former chief Andy Vesey the company said it was maintaining its shutdown timeline.

Nicole Hasham is environment and energy correspondent for The Age, The Sydney Morning Herald, Brisbane Times and WAtoday.

Covering energy and policy at Fairfax Media.