Deputy PM tells Coalition party room AGL’s refusal to sell Liddell power station is about market behaviour but declines to repeat allegation on Sky News

This article is more than 3 years old

This article is more than 3 years old

The deputy prime minister, Barnaby Joyce, has pulled back from a comment he made to the Coalition party room on Tuesday that AGL was “shorting” the market by refusing to sell the ageing Liddell coal-fired power plant to a competitor.



Joyce would not repeat the accusation during an interview on Sky News late on Tuesday – but he insisted the company had not provided a reasonable answer to the question of why it would decommission the New South Wales plant if a rival generation company wanted to buy it.

“Why pull a plant to pieces if there are people out there who want to buy it,” the deputy prime minister said – adding that he knew two interested parties who were serious buyers.

Coalition's public shaming of AGL another assault on imaginary energy enemies | Katharine Murphy Read more

The negative public commentary about AGL’s market behaviour was echoed by the chairman of the Coalition’s backbench committee on energy, Craig Kelly, who said he intended to call the chairman of the Australian Competition and Consumer Commission, Rod Sims, to ask for an investigation.

“There’s an arguable case that AGL are acting in an anti-competitive manner, and I will be calling on the ACCC to investigate,” Kelly told Guardian Australia.

The ACCC has expressed public concern about market concentration in power generation and retailing, and is currently inquiring into energy affordability, with an initial report expected late this month.

Energy industry players argue power prices are a function of tight gas supply and coal capacity leaving the system, not market manipulation and anti-competitive behaviour.

The focus by government MPs on AGL’s market behaviour are part of the Turnbull government’s continuing efforts to strongarm the energy retailer into either selling Liddell, or extending its operating life for another five years – pressure the company is attempting to resist.

The company has agreed to give the Turnbull government a plan within 90 days detailing how it will supply the electricity market with reliable power when Liddell is retired in 2022.



The public commitment came after a meeting between the AGL chief executive, Andy Vesey, the prime minister, and senior government ministers, in Canberra on Monday, where the company was asked to take a proposal to the board to either sell the plant, or keep it open for another five years.

AGL has agreed reluctantly to take that proposal to the board, as well as its own plant to replace Liddell’s current generation capacity with peaking gas and renewables.

Energy policy continued to dominate political debate in Canberra on Tuesday, with roiling contention inside the parliament and continued internal ructions inside the Coalition.

AGL to deliver plan to avoid energy shortage if Liddell power station closes Read more

The former prime minister Tony Abbott, who is an opponent of the clean energy target recommended by Australia’s chief scientist Alan Finkel, told the Coalition party room the government needed to keep its focus on keeping energy affordable.



Abbott told colleagues if the government was to add Finkel’s proposed clean energy target to the existing renewable energy target, which peaks in 2020, but tapers out to 2030, that would be a “difficult position to sustain”.

The proposed clean energy target remains alive, but will not emerge from the current policy development process in the form Finkel modelled during his inquiry.

The government is making it clear the new investment framework, which it wants to resolve before the summer parliamentary recess, will need to be geared to reliability and affordability as well as to emissions reduction.

Government players are now talking in more generic terms about an investment mechanism or framework that will deal with a range of issues, while ensuring Australia is on track to meet the Paris climate target.

With some Nationals MPs are flat-out opposed to the clean energy target, Joyce said on Tuesday the policy was something that needed to be “negotiated” both inside the government, and between the Liberals and the Nationals.

He has previously signalled he would support a clean energy target with a threshold set high enough to allow coal generators to get certificates.

The deputy prime minister said the government would need to “land on a target that keeps our base-load power in play”.