The resources minister, Matt Canavan, says Nationals are not in the business of “mandating that coal should be definitely invested in”, but are pushing to ensure it is not left out as part of the transition to the national energy guarantee.



Canavan told the ABC on Sunday that everyone needed to be “flexible” if Australia was to end a decade-long partisan brawl about climate and energy policy, but he said the Australian Competition and Consumer Commission had provided the government with a roadmap for future investment in all energy technologies, including coal.

The resources minister was referring to a recommendation from the ACCC in a report released last week that the commonwealth consider underwriting new investment in “firm” generation technology, in instances where proposals struggle to get finance, in order to boost competition in the market.

Canavan last week suggested immediately after the release of the report that the ACCC had recommended the government underwrite “baseload power investments”, which he said was a vindication of a push by the Nationals to have government intervention to shore up coal-fired power.

The ACCC has recommeded the government underwrite baseload power investments. Once again common sense of @The_Nationals is vindicated! — Matthew Canavan (@mattjcan) July 10, 2018

While Malcolm Turnbull has been insisting the government’s approach to energy policy is technology neutral, and the market should decide what new investments to bring forward, some Nationals are pursuing a $5bn fund to bankroll coal as a quid pro quo for supporting the Neg.

The coal push could jeopardise state government support for the Neg when ministers meet to decide the fate of the policy in August, because some of the Labor states are already concerned the policy lacks ambition on emissions reduction.

The ACCC’s recommendation last week was about encouraging more dispatchable power into the system, not about baseload – and the competition watchdog made it very clear the recommendation was technology neutral, not configured to getting more coal into the system.

The ACCC chairman, Rod Sims, also made it clear the idea was about reducing power prices for consumers and businesses, and governments favouring particular technologies was one of the factors behind power prices reaching historic highs.

Canavan said on Sunday the ACCC’s recommendation was “a green light for investment in all types of power options, including coal”. He said it was very clear that “coal and gas and all other types of fuel should be included here”.

The resources minister declared investment in the energy sector “should not be treated like a Baskin and Robbins ice-cream shop” with people seeking preferred flavours: “It’s the outcome that matters.”

Canavan said it was possible to reduce power prices “but we have to allow all types of fuel to compete in the market to secure the power that we need”.

The minister did not explain how new investment in high efficiency coal plants, which produce electricity at comparatively high prices per megawatt hour, would reduce power prices for consumers.

He acknowledged that building coal plants took time, although he suggested coal plants could be built more quickly in countries other than Australia, and he also acknowledged that the investment was risky because a future government could implement a carbon price.

The resources minister declared renewables remained a risky technology. “I’m not willing to put all of our eggs in the basket of potential improvements in batteries of renewables.”

Canavan said renewables with firming technology – which is an increasing feature of Australia’s energy market – “might happen”.

But he added pursuing a transition in the energy sector favourable to renewables “would effectively be like going to the casino and saying ‘let’s put it all on black and see how we go’”.

Canavan said he spoken to investors keen on building a coal-fired power station in northern Australia, but he said it did not help “when a Queensland government goes to a state election saying that they won’t allow any new coal-fired power stations to be built”.

“That’s a barrier.”

