The voters’ insistence that the election campaign must be about the cost of living has been a godsend to both major parties. They can look as if they’re lowering electricity and gas prices and avoid talking about their failure to tackle climate change.
Unfortunately, however, climate change and energy prices are closely connected – which does much to explain why their promises to cut power prices never mean much.
Voters seem permanently obsessed with energy prices, and they’ve figured in most election campaigns for decades. But it’s mainly been smoke and mirrors.
Julia Gillard introduced a tax on carbon in 2012 and, had it survived, we’d now be well advanced in reducing our emissions of greenhouse gases. Instead, Tony Abbott got himself elected partly by his exaggerated claims about what it would do to electricity prices, then promptly abolished it.
Today, Labor is still a supporter of climate action, with a legislated commitment to reduce emissions by 43 per cent by 2030. But it doesn’t want to talk about it because it’s proceeding slowly, and working both sides of the street by agreeing to new coal mines and gas platforms.
I doubt if Peter Dutton’s Coalition wants to talk about climate change either. They claim to believe in climate action, but their new plan to switch from renewables to using taxpayers’ money to build multiple nuclear power stations is really an excuse for doing nothing until those power stations may be built in a decade or two’s time.
The switch to distant nuclear resolves the Liberals’ disagreement with the Nationals who, being close to the mining lobby, have no enthusiasm for the Libs’ commitment to net zero emissions by 2050.
So, let’s not mention any of that. “You say the high price of energy has worsened your cost of living? Well, have we got a deal for you.”
Everywhere you look in this campaign you see one side or the other promising something to do with energy. Labor promises to extend its $75 a quarter discount on electricity bills for another six months until the end of this year.
The Coalition’s promising to cut the excise on petrol and diesel immediately by 25c a litre for a year. And it’s promising to reduce the wholesale price of gas by forcing gas producers to make more of it available to local users rather than exporting so much of it at high prices. (Gas is the most expensive fuel used to produce electricity, so reducing its local price would make power a bit cheaper.)
This has made the gas producers very unhappy. And Peter Dutton hasn’t provided much detail about how his gas plan would work.
Even so, Dutton has brought to light some truths that successive federal governments haven’t wanted us to know.
We’re always being told there’s a great shortage of gas because the three big gas liquefaction plants in Gladstone have lucrative contracts to export it all. But as Dutton has correctly said, there’s still a lot of it that’s uncontracted and so could be diverted for local use.
One way to discourage those companies from exporting so much of our gas would be to impose a tax on those exports, as Dutton has suggested. This has these largely foreign-owned companies reaching for their lawyers.
We always assume that our exports bring us great benefits. Mostly, but not always. We are one of the world’s biggest exporters of liquified natural gas, but research by the Australia Institute has found that no royalties are paid on 56 per cent of the gas we export.
Why? Because of loopholes in our petroleum resource rent tax.
Getting back to our complaints about the cost of energy, Labor’s always telling us that “renewable energy is incredibly cheap because its fuel [sun and wind] is free”.
That’s true, but misleading. At present, our grid of high-voltage power lines run from the coalfields to big cities such as Melbourne and Sydney. Switching from coal to renewables involves building a whole new network of powerlines running from solar and wind farms.
Building all those poles and wires is hugely expensive, and the cost will be passed on to you and me in the electricity prices we pay. Only when the new network’s been paid off will retail prices be a lot lower.
But this is where Labor has played a smart card in this election with its promise to subsidise the cost of adding a battery to your new or existing rooftop solar panels (and maybe the Coalition will announce something similar).
Some people have rooftop solar because they want to play their own part in reducing greenhouse gas emissions. Some people see it as an investment in reducing their electricity bills. And some people have panels because all the neighbours have them.
Whatever the reason, about a third of all Australian homes have rooftop solar which, on a per-person basis, makes us the world’s biggest rooftop solar country. Many people were encouraged to install solar by federal and state government subsidy schemes.
Obviously, the panels produce more power than you need during the day, and none at night when you have many gadgets running, especially in winter. So most people put power into the grid during the day and take it out night.
But the energy experts don’t really see rooftop as a key part of the complex distribution system they’re running, and sometimes rooftop can disrupt it.
So, although Anthony Albanese’s offer to cover up to 30 per cent – or $4000 – of the cost of buying and installing a home battery strikes me as likely to be pretty attractive as electoral bribes go, it will help reduce pressure on the grid.
True, it’s of no benefit to renters, or home owners who can’t afford the cost of panels or a battery. But it’s wrong to imagine it’s only the wealthy who’d benefit. If you’re really rich, you don’t worry how big your power bill is.
And don’t forget this: the more voters who see themselves as the good guys doing their bit to stop climate change, the more likely our politicians are to lift their game.
