Finkel report offers hope for bipartisanship, but what about communities?



June 13, 2017 00:28:01

A Q&A special on the Finkel review into the future of energy security saw bipartisanship dominate a discussion that embraced the principles of a report deliberately low on details.

The panel consisted of chief scientist and report author Dr Alan Finkel, Energy Minister Josh Frydenberg and opposition spokesman Mark Butler, and the chief executives of the Climate Council, Amanda McKenzie, and Energy Consumers Australia Rosemary Sinclair.

Dr Finkel set the tone for discussion early when he stressed that the report was interested in outcomes, not detail.

When asked whether the widely reported key recommendation — for a clean energy target (CET) — was or was not a price on carbon, he avoided engaging in the question by saying the CET was a combination of incentives to new generators and costs to highly polluting generators.

“It’s designed as an incentive mechanism,” he said.

“You’re putting an incentive on low emissions and you can interpret it however you wish. I’m quite serious.”

Mr Butler quoted the Grattan Institute as saying that the measures in the CET are all versions of a carbon pricing mechanism.

“What this does is to give a price advantage to low emissions technology. It seeks to shift the relative costs of different types of electricity generation based on their carbon emissions. Of course it’s a price on carbon,” he said.

“We live in a world of carrots and sticks,” Dr Finkel replied.

“The clean energy target is all about the rewards — the carrots.”

When a questioner asked the panel about carbon capture and storage (CCS), Dr Finkel said: “All I care about is lowering prices and lowering emissions.”

Describing himself as the “only technology-neutral person in the room”, he said: “It shouldn’t matter what the technology is. We should use what’s there.

“We’ve got to do that in the most effective way possible. If [CCS] becomes economically viable, then why not?”

When Mr Frydenberg was asked if he would challenge his more conservative colleagues over their stance on the report, he said he would be discussing the changes Australia has seen, not particular policies.

Mr Butler, after joking “That’s the plan — get Josh to do all the hard work, then lose, then hand it over”, said that although Labor preferred a different model, they were prepared to work with this one.

When host Tony Jones challenged Mr Butler on whether Labor would immediately ramp up any plans put in place by the current government, Mr Butler repeated they would seek expert advice.

“The question we have before us is whether the clean energy target and some of the other policies Dr Finkel has proposed are able to be discussed between the Government and the Opposition, finally to break this impasse that has been with us for almost a decade now,” he said.

Ms Sinclair, representing energy consumers, called the CET the “least-cost way” to bring further supply into the market.

Ms McKenzie from the Climate Council described the report as “a way forward” while saying it does not go far enough.

Hazelwood shows the need to plan for communities

Questions during the night addressed the effect a changing electricity market has on consumers through prices and grid stability, but it was a former worker at the Hazelwood power station who provided the most stark example of how badly managed change can hurt people.

“I’m one of the 750 Hazelwood workers that was recently made redundant due to a push to meet the Paris agreement,” he said.

“What I’d say is that the ‘just transition’ part of that was missed.

“From the Latrobe Valley’s perspective, we’ve been hit hardest. The unemployment rate is 20.3 per cent in Morwell.”

He finished his question by asking Dr Finkel why the entire report only mentioned workers twice and does not consider coal-powered regions that will be hit hard by any form of emissions target.

Dr Finkel turned the issue back on the owners of Hazelwood, pointing out that when the expected closure date of 2022 was bought forward, there was a mere five months notice given to workers, the community and government.

“One of the most significant recommendations in our review, in our report is for a three-year notice of closure,” he said.

“Closures of large generators that will have impact have to give three years notice of closure.”

The questioner asked in response: “I think the question was, ‘What’s going to be done about a fair and just transition for workers?'”

“There’s nothing addressed in your document at all.”

Dr Finkel replied: “That’s a local and state and federal government responsibility.

“We’re trying to provide the warning, the three-year notice so that local, state and federal governments can manage that transition.”

Both sides of politics supported the three-year warning, although Mr Frydenberg avoided endorsing it explicitly, saying only that “I think across the board this has been welcome” — which did not reassure the questioner.

Mr Butler was more up-front, calling it “a really important addition”.

“To be a just transition we have to recognise that there are vast parts of Australia that were built up on coal-fired power and energy-intensive manufacturing which may be transitioning over the coming decades,” he said.

While noting that Hazelwood closed because it was 50 years old, Mr Butler said planning for such closures will be hard work and planning and infrastructure investment.

“A three-year notice is a really good start. It’s not sufficient. The Federal Government and state governments need to think about this,” he added.

Will the Finkel report make a difference?

But will the Finkel report lead to lasting change? The last questioner of the evening asked how an energy transition could be future-proofed against a future “progeny of Abbott and Cory Bernardi”.

Ms McKenzie pointed to the example of America, where President Donald Trump’s decision to withdraw from the Paris Agreement was followed by mayors from across the country signing an open letter of support for the international convention.

“Cory Bernardi can’t beat the economics on this,” she said.

“Renewable energy is cheaper than new fossil fuels … regardless of climate change or not, the economics is moving in the direction of renewable energy.”

Ms Sinclair from Energy Consumers Australia said “the community wants this matter settled”.

“We want to be able to rebuild confidence in this market, we want long-term policy settings and we want costs brought under control and reliability and security stabilised so that we don’t have to worry about these things anymore.”

Mr Butler said the process arising out of the Finkel report would engender a responsibility to future generations and a broad framework beyond day-to-day politics.

Mr Frydenberg called the report “the most significant opportunity in this space in years”.

“I think the public expect the political class to deal with it much more effectively than we have in the past … business as usual is not an option,” he said.

The final word went to Dr Finkel:

“I just deeply hope that this is used for constructive purposes. Our report shouldn’t be used as a battering ram or a cricket bat to score political points.









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