New power projects could get govt support

New or expanded pumped hydro, solar, gas and coal projects will be considered for taxpayer-funded support under a plan to increase new power generation.

The technology-neutral approach will focus on generation that can drive prices down, increase competition, and be delivered quickly.

Energy Minister Angus Taylor will give a speech on Wednesday outlining the government’s plan to underwrite new power generation, in the wake of several energy polices being dumped.

“The program will have a level-playing field to enable the best and lowest cost generation options to be supported,” he will say.

“This includes consideration of ‘greenfield’ or ‘brownfield’ projects, as well as upgrades or life extensions of existing generators.

“We cannot continue to have a system where firmness is not considered, transmission costs are not considered and where affordability is not a priority.”

Mr Taylor says direct approaches have been made to the government around specific projects including pumped hydro, coal, gas and solar thermal.

He recently held two meetings with 70 people from retailers, generators, banks, engineering companies and consultancies to shape the criteria used to decide which projects will get underwritten.

Mr Taylor is also recommitting the government to the Snowy 2.0 pumped hydro project,

“Snowy has unrivalled capacity to store power when it is not needed, and generate it when it is needed,” he says.

“While gas and batteries both have an important role to play, pumped hydro provides relatively low cost storage and can run for extended time frames to match volatile supply with volatile demand.”

But there is no new emissions reductions policy after the demise of the National Energy Guarantee.

Mr Taylor says Australia is “well ahead of the plan” to reduce emissions, thanks to a 250 per cent increase in solar and wind power coming online in the next three years.

“We are about to go from wind and solar making up from around nine per cent of (National Energy Market) generation to 33 per cent,” he says.

“I am not aware of any major country which has achieved this kind of transformation in such a short time.”

Instead, Mr Taylor says Australia is focusing on reliability, with a “retailer reliability obligation” to encourage investment generation that can be switched on when needed.

“The reliability obligation features a trigger to attract new capacity into the market where gaps are identified in any individual market,” he says.