The ATA’s Cheap Energy Guarantee

The ATA is inviting coalition MPs to sign up to their Cheap Energy Guarantee.

01 Scrap The Paris Mandate
Utilising Behavioural Economics – not mandates – to achieve Paris Targets.

It is proposed that the National Energy Guarantee would ensure 18% of energy emissions be sourced from renewable sources and that techniques learned from behavioural economics be used to ensure voluntary compliance to bridge the gap to 28%.

This is a significantly superior model to that currently proposed of leaving emissions reduction quotas to the discretion of future Energy or Environment ministers, a model which puts electricity consumers at risk and causes great investment uncertainty. Households and businesses who have a commitment to renewable energy would be able contribute additional funds to ensure Australia matches or exceeds its commitment under the Paris Accord, thereby offsetting their carbon emissions and even leaving a negative carbon footprint. This is more economically efficient and also matches liberal values of individual choice and personal responsibility.

A model based on the most cutting edge behavioural economics research will facilitate compliance.

02 Provide Certainty For Gas & Coal Investment
Ensuring investment certainty through codifying regulatory compensation.

A key factor in increased prices is the barrier to investment due to regulatory uncertainty. As a result, investments in certain types of power generation is not made, and prices of existing generators are significantly inflated due to a perceived shorter lifespan. Codifying a system of regulatory compensation will guarantee companies significant payouts for losses if the regulatory environment is changed. This will provide certainty and will drive down costs in a manner that remains true to free market principles.

03 Abolish All Green Subsidies
Treat all sources of energy generation equally by 2020.

Levelling the playing field by bringing forward the elimination of market-distorting subsidies and green energy programs to 2020 will save considerable taxpayer funds which may be invested elsewhere, while simultaneously stabilising investment opportunities driving down costs to consumers. While the federal government plans to abolish the Renewable Energy Target and phase out subsidies by 2020, states and territories including Queensland maintain their own Renewable Energy Targets.

These do not just hurt consumers within those jurisdictions, but hurt consumers in other states and territories who share the collective National Energy Market grid and have no say in the matter. Where these policies are proven to negatively impact electricity prices across the NEM, it is submitted that the federal government should impose appropriate penalties through a reduction in the state’s share of GST distribution. These savings can be used to fund rebates for electricity consumers across the NEM.

Subsidies provided under the federal Smallscale Renewable Energy Scheme should also be abolished by 2020 instead of the planned 2030 phase-out date in line with the recommendations of the Australian Competition and Consumer Commission (ACCC).

04 Support Struggling Families, Pensioners & Businesses
Redirect savings from the elimination of renewable subsidies and green energy programs into rebates for individuals and businesses until prices stabilise in 2025.

Short term relief may be provided to individuals and businesses through increasing assistance to low income households with funds sourced from savings in subsidies. Additionally, jurisdictions such as New South Wales are to be encouraged to narrow eligibility to existing schemes from higher income earners and redirect this to those more in need.

Similarly, other cost savings could be channelled into the provision of targeted tax credits for energy intensive businesses (manufacturing, those that require refrigeration etc.) to boost economic growth while investment is undertaken.

Economic modelling can facilitate this scheme by establishing a ‘revenue neutral’ level of tax credit whereby the costs of the credits will be offset by revenues generated through its facilitation of investment, job creation and economic activity.

05 Unleash Australia’s Natural Resources
Liberalise gas extraction.

Australia abounds in rich resources of gas (both offshore and onshore; both conventional and unconventional including coal seam and shale) which has the potential to deliver long-term, clean, cheap, energy. The liberalisation of extraction will result in significant further downward pressure upon prices, especially over the medium-to-long term.

06 Supporting Land Owners
Encourage gas extraction through reforming our royalty system.

Adopting a model similar to the United States, where a recent energy revolution has resulted in falling prices and greater energy independence. It is proposed that royalties from mineral extraction are diverted to land owners, a percentage of which is taxed.

Any decrease in governmental revenues will be offset in the longer term through significant increases in extraction while such a policy would lead to a significant boost in support for exploration and thereby extraction leading to significant increases in supply.

07 Incentive state-based energy competition
Using the GST to improve state based policies.

Use GST Distribution incentives to reward states who liberalise gas extraction and allow this to be exported to other states. For instance, Western Australia presently is hindering gas extraction, and reserves a portion of the gas it does extract for the domestic market, thereby lowering its own prices at the expense of other states. A system of GST-based incentives will increase investment, and allowing cross-border supply will increase competition with flow on effects to other states.

08 End Gold Plating & Boost Competition
Adopt sensible regulatory reforms to lower prices through increased competition.

Multiple policies can be enacted that derive from ACCC recommendations to increase competition and end inflated prices through the process known as “gold plating”.

Adopting best-practice regulatory models in states which have avoided increasing their electricity bills due to overinvestment in electricity network assets will assist in lowering prices in the long-term. Empowering regulators such as the AER and AEMO with further powers will also assist in narrowing the information gap which allows energy companies to game the system by convincing regulators that they need to invest in more assets than they need while passing costs to consumers.

Competition can be boosted at a retail level by ensuring greater transparency in third party offer websites, allowing consumers to accurately compare all available offers in the market while preventing energy companies from taking advantage of an ‘inactive’ customer base who are paying more for their electricity than they need to. In jurisdictions with state-owned electricity generation portfolios and networks, these can be divided to increase competition and drive down prices per the ACCC recommendations.

09 Legalise Nuclear
Legalise cheap and clean nuclear energy.

While debate surrounds the short term cost-effectiveness of nuclear power, a lifting of the moratorium allowing potential future market-driven responses will nevertheless provide greater clarify to investors placing downward pressure upon prices.

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19 Responses to The ATA’s Cheap Energy Guarantee

  1. John

    You don’t need to make electricity prices prohibitive nor spend any money to beat clean air targets. Just give all the watermelon green advisors lurking in government qangos the flick and get Melbourne, Sydney, Brisbane and other major City’s traffic moving again.

  2. None

    I don’t want to meet any f****** emissions targets. Why the f*** are people still signing up to this b*******?

  3. Dr Fred Lenin

    Get rid of the whole climate scam and all its works ,total destruction of the u.n.communist /I?G.Soros scum ,thus idea is like abolishing half of the mafia clear the decks let the market sort it out ,money talks ,profits flog theories anytime .

  4. #8. I’ve seen some research that AI may be best placed to design the location and capacity of distribution networks.

    #9. Yup legalise it, make a legal framework for it. With so many SMR startups its likely someone will make a cost competitive reactor in the next 10-20 years. Would be great for remote mining operations and isolated towns. However, if you do #5-7, then building a modern 1GW Gen III+ nuclear plant won’t have a realistic business case versus the newest design gas power plants.

  5. Simpler alternative.

    Immediately abolish ALL Federal energy taxes and subsidies.

    State Govt subsidies and taxes on energy would seems to be in conflict with “free trade between the states”.
    Get rid of them too.

  6. Dr Fred Lenin

    That would solve all the problems with energy let private companies make an honest profit and they will do the rest,get the career pollies out of energy and watch it really work . What the hell would a failed lawtradespersons know about generating energy? Not a bloody thing .

  7. Art Vandelay

    Utilising Behavioural Economics – not mandates – to achieve Paris Targets.

    It is proposed that the National Energy Guarantee would ensure 18% of energy emissions be sourced from renewable sources and that techniques learned from behavioural economics be used to ensure voluntary compliance to bridge the gap to 28%.

    Behavioural Economics is a load of bollocks.

  8. .

    Let me be clear; this is all great stuff.

  9. RobK

    The sooner the better. Less money wasted.

  10. bollux

    Bring back hanging for traitors like Turnbull.

  11. Sydney Boy

    Much of the “gold-plating” claims are myth. Prior to 9-11, much of Australia’s East Coast energy transmission and distribution network was single-point-of-failure. Most of the infrastructure installed since has been adding redundancy (in case of natural disaster or terrorism) into the system. The term “gold-plating” was invented by the Left to shift the blame of increased costs to capitalism and hide the costs of renewables.

  12. 2dogs

    If the Libs were smart, they would deal with this situation by having a plebiscite on energy policy. The swampies would be rebuked, and could not continue to advocate their ideas without being labelled anti-democratic.

  13. I wonder how many green zealots would sign up for dearer power in support of their ideology if it was voluntary? Not many I think!

  14. Bruce of Newcastle

    Utilising Behavioural Economics – not mandates – to achieve Paris Targets.

    How about utilizing behavioural economics to educate politicians in the science and economics of climate policy.

    As soon as they understand that nothing much is happening climate-wise, and that spending lots of money to save us from nothing much is silly, they could use their new found budget savings to buy elections sorry invest in marvellous things for themselves sorry Australians.

  15. “The ACCC and the Australian Energy Regulator (AER) will be directed to set a default price for households and small to medium-sized businesses; a price that will deliver genuine savings to customers.

    “This will replace the current standing offer in New South Wales, Victoria, South Australia and South East Queensland – jurisdictions where prices are not regulated.”

    – Scott Morrison, 20 August 2018.

    So will libertarians finally admit that Labor is the party of freedom and the Coalition stands for regulation and control?

  16. .

    When you start voting for the LDP, Alan.

    https://www.ldp.org.au/prosperity

    …and in your heart, you know that I’m right.

  17. The next government will be either Labor – the party of freedom and choice – or the Coalition – the party of “a default price for households and small to medium-sized businesses”.

    The LDP is not an option. And after the recent performance of the solitary MP of that persuasion, will not be for a long, long time.

  18. Bruce of Newcastle

    It’s nice to see you drop by Alan!

    My comment to you is this:

    1. Real world climate data shows that CO2 has only a small actual effect (2XCO2 below 1 K/doubling, which is harmless). The satellite temperature record shows very little warming this century, if any. As you can see in the linked graph the satellite temperature data is crosschecked by balloon radiosonde data. Furthermore it is consistent with other data like global snowcover, which is likewise has a flat trend this current century so far. As you can see from these graphs there’s not much happening other than the normal ups and owns, like el Ninos.

    2. Even if there was much CO2 produced climate change, the policies that are being promulgated by the Greens, Labor and the Turnbullites are crazy. There is a well-known empirical relationship between adoption of wind and solar generation and higher electricity prices. Thus when it is promised that wind and solar will reduce electricity prices that is an erroneous statement.

    3. If there was really any dangerous global warming going on the appropriate energy policy would be to build new primary hydroelectricity projects (eg like NZ) and nuclear power plants (eg. like France). Those are the only serious and low cost non-CO2 producing electricity generation options.

    4. The renewables policies being pushed by Turnbull, Shorten and Di Natale will seriously harm poor people, especially pensioners. High electricity prices are also have a large impact on the cost of living indirectly – the supermarkets use lots of electricity to run fridges, lights and air conditioning for example.

    I find it very strange that Labor should be pushing a catastrophic energy policy mix which will massively harm the very people they claim to be representing.

  19. old bloke

    01 Scrap The Paris Mandate
    Utilising Behavioural Economics – not mandates – to achieve Paris Targets.

    It is proposed that the National Energy Guarantee would ensure 18% of energy emissions be sourced from renewable sources

    No, let the market decide. I support freedom of religion so those Gaia worshippers who want green electricity can pay for it themselves, as an infidel I’ll take cheaper coal fired electricity.

    07 Incentive state-based energy competition
    Using the GST to improve state based policies.

    Why single out WA? If you wish to incentivise state based energy competition, penalise those states which dynamite or shut down their coal generators, lock up all their gas reserves, and refuse to build dams which would provide more hydro energy.

    The West Australian government made a deal with gas exporters to reserve a portion for local use, which the gas exporting companies agreed with. Other states could also have made similar arrangements had they so decided.

    I’m in general agreement with your other points.

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