Federal Independent MP Zali Steggall has asked Australia’s auditor general to investigate a Liberal-National government scheme to underwrite gas, hydro and coal power, saying it lacks transparency and citing legal advice that the conservative government had no constitutional or legislative authority to introduce it.
Announced in late 2018 after the government abandoned former Prime Minister Malcolm Turnbull’s proposed National Energy Guarantee (NEG), the Underwriting New Generation Investment (UNGI) scheme promises public support for new dispatchable power generation projects to increase competition in the electricity grid.
Guardian Australia reports 12 projects have been shortlisted, including six pumped hydro plants, five gas generators and an upgrade to the Vales Point coal-fired power plant.
Ms Steggall has written to the auditor general, Grant Hehir, asking him to consider investigating the program “as a matter of priority”.
Her letter refers to research by The Australia Institute, a progressive thinktank, suggesting the program has no constitutional or legislative standing, no guidelines or criteria to assess projects, and its development and implementation did not follow a clear process.
She said despite these apparent flaws the government had shortlisted projects, started “advanced negotiations” to support gas-fired plants in Victoria and Queensland and entered a memorandum-of-understanding with the New South Wales government to support three projects in the state.
The federal government is increasingly emphasising the need for greater investment in “fast start” gas power.
Guardian Australia reports in media interviews over the past week, the energy and emissions reduction minister, Angus Taylor, has called for a “gas fired recovery” from the COVID-19 pandemic after the collapse of oil and gas prices.
Ms Steggall, who entered parliament last year on a climate action platform, said the focus on fossil fuels was questionable and there was little visibility of how and why the projects shortlisted for underwriting had been chosen.
She said her concern about the program was heightened by the controversy over the $100 million sports grant program that led to the resignation of former minister Bridget McKenzie.
The Australian National Audit Office found 43 per cent of projects funded under that program were ineligible when agreements were signed.
“There’s just no transparency or accountability around this,” Ms Steggall told Guardian Australia.
“We’ve seen what happened with sport rorts. We’re talking about commonwealth money at a time when we know the economy has taken a hit due to coronavirus, and I think it should be properly investigated.”
The Australia Institute analysis is based in part on a legal opinion by barristers Fiona McLeod SC and Lindy Barrett, which said Mr Taylor does not have constitutional authority over electricity or legislative authority to fund projects as proposed under the UNGI scheme.
Guardian Australia reports a spokesman for Mr Taylor rejected this opinion.
He said the then Department of Environment and Energy commissioned legal advice and “undertook all necessary legal steps, including publishing clear merit criteria” in December 2018.
The spokesman said the UNGI scheme was introduced after the Australian Competition and Consumer Commission identified the need for new “firm” generation in the electricity grid to improve reliability, promote competition and drive down prices, particularly for commercial and industrial customers.
“The UNGI program, which is the most cost-effective way to bring firm generation into the market, is a direct response to this recommendation of the ACCC,” Mr Taylor’s spokesman said.
Tony Wood, the energy program director at the Grattan Institute, last year warned the scheme was quite different to the ACCC recommendation that sparked it and could work against the government’s goals of helping cut power bills and ensuring there was enough firm electricity that could be called on at any time as it would make energy companies without government support less likely to invest in new generation.
EcoNews is an independent publication that relies on contributions from its readers.
WE’RE BUILDING A PLATFORM WITH A CLEAR FOCUS ON THE ENVIRONMENT, CULTURAL AND SOCIAL GOOD. CONTRIBUTE AND TOGETHER WE CAN MAKE AN IMPACT.
If you value EcoNews, but are unable to contribute via sponsorship or advertising we ask that you promote our online store The Native Shop – www.nativeshop.com.au via your social media to assist us to fund this valuable service.
One Response
Time to take the lid off the rats nest of mass corruption.