A Greens-led bill to prohibit government funding of coal-fired power in Australia has been slammed as a reckless ideological tactic, which would cause significant and irreparable economic damage in a new report released today by free-market think tank the Institute of Public Affairs.
“The IPA strongly opposes the proposed Coal-Fired Power Funding Prohibition Bill 2017 as it violates the principle of technological neutrality in the energy market,” said Kurt Wallace, Research Fellow at the IPA.
The Coal-Fired Funding Prohibition Bill (2017) proposes to prohibit the Commonwealth government or its agencies from funding the refurbishment, building or purchase, or assisting in the transfer of ownership, of a coal-fired power station.
“The bill is objectionable, not because government should support coal-fired power, but because it further distorts the market away from reliable power production by favouring wind and solar energy generation at the expense of coal-fired power,” said Mr Wallace.
“All forms of electricity generation should compete in an open and free market without government intervention.”
“Either the bill should be withdrawn or the prohibition on government funding of coal-fired power should be extended to all forms of energy generation, including wind and solar.”
IPA research has found that every major instance of government intervention into the energy market has coincided with increases to electricity prices, including the introduction of the RET in 2000, the expansion of the RET in 2009, the introduction of the carbon tax in 2012, the signing of the Paris Climate Agreement in 2015, and the announcement of the National Energy Guarantee in 2017. The only occasion in which there was a sharp drop to electricity prices was following the repeal of the carbon tax in July 2014.
“The continued expansion of government backed renewable energy at the expense of coal-fired energy over the last 20 years has caused a 220 per cent increase in electricity prices, which is more than three times the rate of inflation,” said Mr Wallace.
To deliver affordable and reliable energy the government should:
- Adopt a policy of technological neutrality.
- Withdraw from the Paris Climate Agreement.
- Remove the ban on the development of nuclear energy generation in Australia.
- Reduce regulation and red tape on the coal and gas industries.
- Not extend the RET beyond 2020, and remove all existing contracts for solar and wind energy generators which have been made under the RET.
Download the report Technological Neutrality In Australia’s Energy Market here.