The electricity industry crisis has reached new heights, with the federal government pressuring giant energy company AGL to keep the ageing Liddell coal-fired power station open for a further five years after 2022, its due date for closure.
Liddell, in the Hunter Valley region of NSW, is a coal-burning dinosaur. The reality is neither the government’s policy of defending Big Coal, nor its reliance on the so-called “energy market”, will solve the problem of skyrocketing electricity prices for consumers or the looming environmental crisis.
Energy commentator Giles Parkinson explained: “The proposal to extend the life of Liddell is increasingly looking like a proposal of breath-taking stupidity — a decision that would do exactly the opposite of its stated purpose of boosting reliability and lowering costs. It would kill innovation and new investment, and lead to huge questions about probity and markets.
“AGL has said that Liddell’s output could be replaced by wind, solar, battery storage and pumped hydro. But that whole process is now put at risk by [Malcolm] Turnbull’s extraordinary intervention.”
Despite the pressure from the Prime Minster, AGL still appears likely to reject the government's demands. AGL chief executive Andy Vesey said: “We are committed to finding the best solution for the market. We believe we can deliver that without having to consider the extension or sell the plant and that's what we are going to work on.”
With the sale of most of the NSW power grid to private corporations last year, the bulk of Australia's power production and distribution networks is now in private hands. The energy market is merely a figleaf for a cartel of monopoly corporations, currently 60% based on coal, which are ripping off consumers.
The Liddell controversy reinforces the urgent need for a complete reversal of direction for the power industry. Far from relying on market forces to solve the energy crisis, we need to re-nationalise electricity production and distribution under workers’ and community control.
Liddell and all other power stations should be re-nationalised, under combined federal-state ownership, and placed under a board of management including both workers’ delegates and elected representatives of the community.
It is an (admittedly unlikely) option for the government to take over Liddell and other ageing coal-fired power stations, which are effectively worthless in financial terms, just to keep them open past their use by date.
But our demand must be to re-nationalise Liddell and other ancient coal-fired plants to ensure they are shut down as soon as possible. This would open the way for investment in large-scale renewable energy.
The Australian Energy Market Operator must be replaced by an elected national community energy council to oversee the power system and make key decisions on the closure of old power stations and investment in new renewables-based power plants.
Only in such a manner can the current crisis of the privatised electricity system, relying largely on fossil-fuel production, be fundamentally transformed into a renewable-based system, which can operate in the interests of the community and the environment.
[Jim McIlroy is a member of the Socialist Alliance.]