PM to face-off with Abbott in fiery NEG showdown
MALCOLM Turnbull is set for a showdown with rebel Coalition MPs in a high-stakes party room meeting today where a $550-a-year cut to the average household power bill is on the line.
The Prime Minister is facing an uphill battle to convince sceptics to back the National Energy Guarantee, with Tony Abbott reportedly branding the policy a "crock" at a backbench energy committee meeting last night.
But ahead of the meeting - set to be a major hurdle for the NEG - one of Australia's leading electricity companies has reportedly declared it will seek to build a new "clean-coal" power station if Mr Turnbull can lock in support for his "NEG-plus" plan.
In a move that could help Mr Turnbull win over critics, Delta Electricity's chairman Trevor St Baker has told The Australian the company could build a 1000-megawatt coal-fired power station in under five years if the government accepts a consumer watchdog recommendation for it to underwrite new power generation.
Australia's largest energy users, including BHP, Rio Tinto, BlueScope and Shell, also made a last-ditch attempt to convince federal MPs to support the NEG last night by writing to them to warn inaction could lead to even higher power prices, The Australian reports
The Coalition joint party meeting is due to get underway at Parliament House at 9.30am this morning.
If the Coalition backs the plan Energy Minister Josh Frydenberg puts forward, the minister will hold a phone hook-up with his state counterparts this afternoon to kick start the next step in the process.
Mr Frydenberg aims to legislate the NEG by the end of the year.
Last night, after a two hour briefing, seven members of the committee voted to approve the NEG policy going to the party room today.
Three members, including Mr Abbott and Liberal MP Craig Kelly, voted against it.
Publicly, Mr Abbott told the ABC's 7.30 program last night that the NEG was flawed because it was "run" to reduce carbon emissions, not just to drive down prices and ensure a reliable power supply.
Mr Abbott, former deputy prime minister Barnaby Joyce and a handful of other backbencher critics have threatened to cross the floor over the NEG.
Mr Joyce said he would listen at today's meeting but he was concerned there was no mechanism in the current NEG that would set a price target for big electricity companies.
"We really don't have any definitive mechanism to deal with price," he told reporters at Parliament House this morning.
"We've got to have a mechanism that is able to enforce the savings that we are talking about.
"If we can't enforce some sort of regulation of price then corporations will do what is their statutory duty and get the biggest profit they possibly can."
He argued government should have a divestiture power, which would allow it to penalise companies by divesting them of one of their assets if they did not lower power prices.
"This is not a case of being in a team with Abbott or being in a team with somebody else, it's not that at all," Mr Joyce said.
"In fact, I find that, to be honest, a complete misreading of it. I'm not in a team with anybody except in a team with people trying to pay their power bills."
A report by the Energy Security Board has predicted household power bills could be slashed by $550-a-year over the next decade if the NEG is implemented.
It found $150 in savings would come as a direct result of the NEG, while $400 would come from new, mostly renewable energy generation coming into the market.
Under the current NEG, energy companies such as AGL or Origin would be forced to meet a reliability guarantee and an emissions guarantee.
The reliability guarantee, designed to prevent blackouts, would force them to provide a set amount of baseload power from sources such as coal, gas, pumped hydro and batteries.
They would also have to provide a certain amount of power from clean energy sources to meet the emissions guarantee or face deregistration from the market.
The NEG would also lock in an emissions reduction target of 26 per cent for Australia to meet the Paris Agreement on climate change.
Australia's carbon emissions are already on track to drop by 24 per cent without the policy.
The NEG-plus proposal means the government would implement the initial plan but also accept the ACCC's recommendation to underwrite new power generation, which could potentially include coal and gas.
Mr St Baker told The Australian if the government launched the "NEG-plus", Delta Electricity could seek to build a power station for as little as $2.5 billion if it was built on the site of an old plant which still had transmission and cooling water capability.
He told the publication had already spoken with Japanese and Chinese developers with experience in rolling out High Efficiency, Low Emissions plants internationally.
"The ACCC's recommendation will nicely complement the NEG. We need a Hazelwood replacement and there are competing parties wanting to work with me in different capacities to bid - on open competitive equal terms against all other options - to offer a Hazelwood replacement as a HELE (high-efficiency, low-emissions) plant," Mr St Baker said.
"Alternatively we could bid in NSW for an 800MW HELE plant at Vales Point … In NSW it's critically needed before Liddell closes."