Wednesday, 17 September 2008

Call for a national energy policy

An Op-Ed in the Business Spectator makes a pitch for an Australian energy policy.

During the drive to develop, promote and implement an emissions trading scheme, government has said very little about the specific technologies to be deployed to achieve relevant goals while maintaining a viable economy. These details, as well as strategies to ensure long term energy security, would normally be found in a national energy policy; the last of which for Australia was issued in 2004.

Some of us harbour a suspicion that the Rudd government thinks its emissions trading plans – plus the enlarged renewable energy target – make up a national energy policy. If this is true, it is a serious error of judgement and one capable of causing immense trouble if the government tries to make policy on the run to deal with the inevitable ‘unintended consequences'.

It is madness to rely on the "lucky country" approach to energy policy today. Australian governments have to ensure they have an overall plan for managing energy issues in an exceptionally difficult global environment.
In addition to defining a strategic course for Australia's interim and long term energy future, a national energy policy also has tactical implications. A defined policy will free up billions of dollars in capital investment currently stranded on the sidelines due to undefinable and unpredictable economic risk. Ongoing lack of investment contributes to the more tangible follow-on risk of poor energy quality and reliability due to the failure of energy infrastructure/capacity growth to match increasing demand as well as the inadequate mitigation of supply risk through diversity of supply, diversity of supplier and diversity of supply route.

1 comment:

  1. A problem with micromanaging energy policy is that the government picks winners in advance that may not work out, an example being the US DoE's multibillion dollar support for hydrogen cars. On the other hand some long term planning is needed as shown by the UK's predicament over depleted North Sea oil and gas reserves.

    A wide ranging policy should eliminate inconsistencies; for example I think the '20 by 20' MRET implies much greater carbon reductions than Garnaut's 5% by 2020. Annual benchmarks should be set to monitor progress as I believe we are nowhere near being 'on track' without exaggerating the benefits of tree planting and low capacity factor wind and solar. The policy statement should also address funding options for big ticket items such as transport mode switching, home energy use reduction and low carbon electrical generation.