First the vision, now for the brawling over Palaszczuk’s energy plan
Bold, brave and visionary will be used a lot to describe the Palaszczuk Government’s energy plan, and that’s not normally associated with modern politics.
Premier Annastacia Palaszczuk has announced a massive commitment to renewable energy. (AAP Image/Darren England)
But while the energy plan gets the big picture politics right it is setting itself up for some almighty dust-ups. Big picture stuff always does that but there are years of wrangles in this one and some potentially damaging outcomes.
The $62 billion project will require Queensland to increase its already staggering debt even more. Half will be government funded and at the moment talks with the Federal Government to stump up were described as “encouraging”, which usually means the PM is a long way from committing. So, use a pencil when writing down how much will come from them.
The Government claims the modelling supports the extra debt but we have yet to see the detail of that.
As is fairly normal with this Government, not everything is as it seems. The jewel in the crown of the plan is its two pumped hydro projects which have yet to have their engineering or environmental work completed and already there is talk of the need for offsets, which means there will be environmental issues.
The fact that there is no engineering yet would indicate that any cost you are thinking of now would be a best guess estimate.
You just need to look at the the Snowy Hydro 2.0 project to see how these projects can get out of hand, although Energy Minister Mick De Brenni is confident that won’t happen in this scheme.
This is also the case with the Tarong West wind farm project the Government announced as part of the scheme. It is two years away from being approved and while it’s likely to get the ticks necessary you can’t bet on it.
There is also industry speculation that both the Borumba Dam project, near Imbil, and the Pioneer Burdekin project, near Mackay, are not certain. Both are technically difficult and the Mackay Conservation Society has some serious doubts about the impact, both on water and the environment.
The plan also neglects to mention that there is already a major 1.2 gigawatt pumped hydro project well down the track. The Bowen River Utilities scheme already has Federal Government funding and is in negotiations with CS Energy for an offtake deal.
Bowen River Utilities said its project was “more than enough” to power all of north Queensland’s households. It also claims to be the battery of the north.
While debt will be an issue for the Government and the taxpayer, the private sector will be called on to fund half and about $17 billion alone will be needed for solar and wind projects. There is an appetite from investors for renewable projects, but there is little detail about where all the money will come from.
The Queensland Resources Council points out that business was currently wary of dealing with the Government after it mugged the mining sector with massive royalty increases.
A key point in the Government’s favour is that the cost of doing nothing would be considerably higher. Premier Annastacia Palaszczuk pointed out there had been almost 100 natural disasters in Queensland in the past decade. Climate change is here.
The Government is also banking that hydrogen will be commercially viable for a gas-hydrogen peaking power station and that’s not a given.
And Intergen would be wondering how its Millmerran coal fired power station will fare in all this. It has a scheduled life out to 2051, well past the 2037 coal cut-off. It also has a stake in Callide C.
What the energy plan does get right is the crude politics. It gives the Government something to point at in the debate over climate change and does so while keeping the faith with the unions and regional Queensland.
All in all, the plan probably rates highly as a bold and visionary concept but it will be bare-knuckle fighting from here.