The treasurer has pushed back against backbenchers arguing for a return to coal saying ‘the days of subsidies in energy are over’

The treasurer, Scott Morrison, has smacked down a backbench push for the Turnbull government to back a new coal plant, arguing that high-efficiency coal does not mean cheap energy, and taxpayers would also be left on the hook.



Morrison used a public appearance on Wednesday to rebuff fresh positioning by conservatives on coal, declaring it “false to think that a new coal-fired power station will generate electricity at the same price as old coal-fired power stations”.

The treasurer pointed to the price differential between the electricity produced by existing assets and the newer high-efficiency coal plants.

He said existing plants were bidding into the national electricity market at $30 or $40 per megawatt hour while a new high-efficiency plant, which would take several years to build, would be bidding into the system at about $70 or $80.

“So you don’t just open up one down the road and all of a sudden it is producing power at the same price as Bayswater or any of the others,” Morrison said. “That is just not an economic fact.”

Morrison’s comments won a rebuke from Tony Abbott – who is at the forefront of the fresh round of lobbying. The former prime minister pointed out that Morrison had once waved a lump of coal around in parliament to make a political point.

“Scott Morrison himself came into question time one day a few months ago and waved around a big lump of coal and said to the Labor party ‘This is coal, this is a good thing, don’t have coal-phobia’,” Abbott told 2GB.

Abbott noted caustically that the previous intervention from Morrison made “a lot more sense” than his intervention on Wednesday.

The renewed Coalition in-fighting comes as the Turnbull government has redoubled efforts to secure a potential buyer for AGL Energy’s ageing coal plant, Liddell.

The government has approached the Hong Kong-owned Alinta Energy, and the company has now signalled it will bring forward an offer on Liddell by the end of this month.

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The government wants to extend the life of Liddell past its planned closure in 2022 to ensure system stability until the expanded Snowy Hydro scheme comes online.

Last December AGL confirmed it would close Liddell in 2022 and replace the coal plant with a mix of renewables, gas power for peak periods and battery storage.

But senior government players are concerned AGL wants less competition in the market in order to boost its own profitability, and point to the company’s lack of guaranteed financial commitment for all stages of its proposed transition plan after it mothballs Liddell.

Alinta has been keen to boost its market share, recently acquiring the Loy Yang B power station in Victoria, and the company is also close to finalising a $400m investment in the Yandin Wind Farm in Western Australia.

AGL confirmed on Wednesday it had been approached by Alinta with a preliminary expression of interest in Liddell, but it was not yet in receipt of an offer.

“Should a formal offer for Liddell be received, it would be given consideration in order to meet our obligations to customers and shareholders,” the company said in a statement.

Both the government and Alinta have ruled out taxpayer support in the bid, which may need to be as high as $1bn given upgrades would be required to keep the plant operational.

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Alinta signalled on Wednesday it would want to take possession of the plant in August or September of this calendar year, and was prepared to sell power back to AGL to allow the company to proceed with its planned transition.

Conservative government MPs, including the former prime minister Tony Abbott, have been campaigning on coal for many months. A new ginger group, dubbing itself the Monash Forum, has emerged this week with a manifesto – a bout of positioning ahead of the anticipated loss of the 30th Newspoll in a row next week.

Abbott will take his annual charity bike ride, the “pollie pedal” through Victorian coal communities next week, including past the decommissioned Hazelwood power station site. The former prime minister noted on Wednesday he would be in the area around the time the next Newspoll was published.

While one of the aspirations in the manifesto is public investment in a new high-efficiency coal plant on the site of the now decommissioned Hazelwood coal-fired power station in Victoria, Morrison declared on Wednesday the government was not interested in subsidising any source of energy.

“The days of subsidies in energy are over, whether it is for coal, wind, solar, any of them,” the treasurer said.

“That is the way I think you get the best functioning energy market with the lowest possible price for businesses and for households and that is what the national energy guarantee and our energy policies are deigned to achieve.”

The national energy guarantee will go to a meeting of state energy ministers later this month for consideration.