Something ‘terribly wrong’ on power prices: minister
RENEWABLE energy subsidies and emission-reduction targets will be replaced with a focus on lowering electricity prices under the Morrison government.
New Energy Minister Angus Taylor said the federal energy policy has been "a mess" and says the fact prices have soared while blackouts persist means something has "gone terribly wrong".
Mr Taylor said he won't be scared to take the extreme measure of divestment, or forcing energy retailers to sell off part of their business, if they inflate electricity bills.
"The power to divest is obviously a last resort," he said.
Pitching himself as the "minister for reducing electricity prices," Mr Taylor will today admit in a speech that energy policy had not been designed with Australians in mind, as ideological objectives caused those in charge to "lose sight" of the aim of keeping the lights on.
"The challenge now is to accept that we had a mess and we are now fixing it, with one aim only - to reduce power prices while keeping the lights on," he said.
"This government has made great strides on energy in recent times, but energy policy was bogged down for years in complexity.
"Complex scheme layered upon complex scheme."
The complex schemes Mr Taylor refers to are understood to the Large-scale Renewable Energy Target (LRET), which subsidises the development of renewable energy.
The Daily Telegraph understands emission-reduction will also play no future role in energy policy.
Asked directly if he will keep any emission-reduction targets, Mr Taylor said his only focus was lowering power bills and improving reliability.
"I am focusing only on price, unambiguously and no other distractions," he said.
"Price is the goal. We are not going to get into ideological debates."
However, the emission-reduction targets would need to be formally dumped in Cabinet. The name of the new energy policy is not expected to be the National Energy Guarantee, but this would also need to be changed at Cabinet.
Mr Taylor, who has energy sector expertise from his time as a director at management consultancy firm Port Jackson Partners, acknowledged "prices are no longer sustainable".
"They know instinctively that prices are too high because they remember a time when electricity in this country was abundant and cheap. They know that something has gone terribly wrong," he said.
The Morrison government will try to lower electricity prices by adopting a series of ACCC recommendations including:
● Setting a default price for electricity that is lower than current rates;
● Encouraging new entrants to the market to increase energy supply; and
● Stopping price gouging by having an ongoing ACCC inquiry into pricing and the option of divestment for retailers that inflate prices.