By Mike Foley, originally published in the SMH on 12th April 2021.
An anti-corruption advocate has warned political donations are undermining public confidence in plans for a gas-fired economic recovery, as Energy Minister Angus Taylor rejects an allegation he pressured an energy agency to alter its modelling to favour gas.
The Centre for Public Integrity’s submission to the Morrison government’s national gas infrastructure plan said the potential for large political donors to benefit from government-subsidised infrastructure created a perception of “undue influence”.
The Centre said over the two decades to 2019, gas companies Woodside and Santos had disclosed donations of $2 million and $1.5 million respectively. Both companies were developing projects that could benefit significantly from government-funded infrastructure.
“It’s critical that impartiality is the key to decision making. We can never be certain that is so when people who are making decisions are in thrall to the political donations when the decisions benefit those donors,” the centre’s chairman, Anthony Whealy, said.
A spokesman for Mr Taylor said all government decisions were made in the national interest and “there are well-established processes for declaring and considering any real or perceived conflicts”.
Ahead of a Four Corners program on Monday night, the ABC reported Mr Taylor had a “heated conversation” with the then chief executive of the Australian Energy Market Operator (AEMO), Audrey Zibelman, before the publication of its Integrated System Plan (ISP) that was released in July.
Four Corners claimed Mr Taylor pressured Ms Zibelman to change the findings of AEMO’s report, which were unfavourable to the prospects of gas-fired power’s growth.
Mr Taylor’s spokesman said the minister’s dealings with Ms Zibelman were “positive and constructive” and as a member of AEMO the federal government was invited to provide feedback on drafts of the ISP.Advertisement
“We reject the premise there was undue pressure being exerted on AEMO,” the spokesman said. “The Commonwealth government sought to understand and raised the clear discrepancy … The AEMO ISP modelled a future gas price that was around double the forward price being set by the market.”
A high gas price would encourage generators to seek out cheaper power sources such as wind and solar.
The Morrison government is considering several initiatives for a “gas-fired recovery” from the coronavirus recession.
It set aside $11 million in the federal budget for the gas infrastructure plan to build gas pipelines that connect with industrial and energy facilities and is finalising plans for a 1000-megawatt gas power plant in the Hunter Valley.
The gas plant, to be built by Commonwealth-owned utility Snowy Hydro in Kurri Kurri, NSW, would succeed the ageing Liddell coal plant, which is set to close in 2023.
Mr Taylor says 1000 megawatts of dispatchable power from a fast-start gas plant would help back up the growing share of intermittent supply from renewable energy and put “downward pressure” on energy bills.
AEMO has forecast a 154-megawatt shortfall following Liddell’s closure.
Mr Taylor has set an April 30 deadline for private industry to commit to final investment decisions on dispatchable energy projects totalling 1000 megawatts, including gas plants and large-scale batteries.
His spokesman did not rule out using public funds to build or operate the Kurri Kurri plant but said early assessments of the plant’s viability were “very strong, with a larger generator expected to deliver a higher rate of return than a smaller generator”.
Snowy Hydro chief executive Paul Broad told a Senate estimates hearing last month construction would cost between $600 million and $650 million.
The Grattan Institute’s energy grid report, released on Sunday night, found while gas-fired power would play a role in supporting renewable energy by providing on-demand power, it should “not have an expanded role”.