Taxpayer funds will be put towards a new power project, with the energy minister leaving the door open to expanded hydro, solar, gas and coal generation.
Energy Minister Angus Taylor on Wednesday outlined the government’s technology-neutral approach to underwrite new power generation, in the wake of a number of energy policies being dumped.
The focus of the new project is to drive prices down and increase competition, while being delivered quickly.
A shortlist for possible projects is flagged for release in January, months out from the federal election which is due by May.
Mr Taylor says direct approaches have been made to the government around specific projects including pumped hydro, coal, gas and solar thermal.
However, Labor says a new coal-fired power station has no part in Australia’s future energy mix.
Industry has described such a project as ‘uninvestable’, opposition energy spokesman Mark Butler says.
‘Any indemnity by taxpayers against future carbon risk would likely run to billions of dollars that could otherwise be spent on schools and hospitals,’ Mr Butler told AAP on Wednesday.
Mr Taylor recently held two meetings with 70 people from retailers, generators, banks, engineering companies and consultancies to shape the criteria used to decide which projects will get underwritten.
The government has recommitted to the Snowy 2.0 pumped hydro project as it has ‘unrivalled capacity’ to store and generate power as needed.
But there is no new emissions reductions policy after the demise of the National Energy Guarantee.
The minister is instead focusing on reliability, with a ‘retailer reliability obligation’ to encourage investment generation that can be switched on when needed.
Woodside Petroleum CEO Peter Coleman has joined mining giants BHP and Rio Tinto to call for a carbon price to help with the transition to renewable energy, which was swiftly dismissed by Mr Taylor.
Australia is ‘doing extremely well’ to bring electricity emissions down, thanks to a 250 per cent increase in solar and wind power coming online in the next three years, Mr Taylor said.
While emissions in the electricity sector have decreased, other sectors continue to increase, driven by LNG production.
The latest government data showed overall greenhouse gas emissions climbed 1.3 per cent to their highest quarterly levels in eight years.
The Australia Institute’s climate and energy program director Richie Merzian says the nation will only meet its two Kyoto targets due to loopholes, which are not available under the Paris agreement.
The government’s plan to reduce electricity prices also includes the threat of possible divestiture of energy businesses, yet legal advice provided to the Australian Energy Council has questioned if the government’s powers extend that far.
Mr Taylor says the government has also sought legal advice and he’s ‘confident’ of their position.