The Coalition's hazy northern energy vision

The Coalition's Northern Development Plan talks up the prospect of a $150 billion energy opportunity. But it's hard to see the document as anything other than populist thought bubbles to counter those of Bob Katter.

The Liberal party recently released what it billed as a ‘green paper’ entitled, '2030 Vision for Developing Northern Australia'. As a policy announcement it is vague and non-committal. It expresses support for development of northern Australia but without specifics about what would be done or how.

A number of the ideas espoused in the document bear very close resemblance to those championed by North Queensland MP Bob Katter. This is no coincidence as the formation by Katter of his own party has emerged as a serious threat to the National Party in regional areas of Australia, particularly northern Queensland.

One example is Katter’s promotion of the Queensland ‘Clean Energy Corridor’ which is part of his party’s 'Reconstructing Queensland' policy platform. This involves construction of a major new transmission line (the $1.5 billion Copperstring Project) connecting Mt Isa to the NEM, which would also support development of renewable energy projects in the vicinity. One of these is the huge 700MW Kennedy Wind Farm located in Katter’s local electorate and for which he is a strong supporter.

The Coalition’s Northern Australia policy statement states under the arresting heading, Opportunity: $150 billion energy export industry for Northern Australia:

Northern Australia has significant potential to help mitigate problems with energy provision across Asia and the Tropics and to grow its energy export industry to over $150 billion in 20 years.

The region is already home to 90 per cent of Australia’s gas reserves in the Browse, Bonaparte and Carnarvon basins which can continue to be strong sources of growth. In addition, it is also home to numerous rivers and tracts of land that are well-located for hydro, solar and wind power. Examples of some possible projects include the Kings Canyon Solar Power Station, the Burdekin Dam Hydro-Electricity project and Kennedy Wind Farm.

To obtain clarity about the Coalition’s policy intentions, Climate Spectator asked a series of questions forwarded to Andrew Robb’s office but is yet to receive a reply.

In particular we wanted to know exactly what makes-up this $150 billion estimate. It’s so vague that it’s incredibly hard to pin down exactly what they’ve got in mind.

As an illustration, the Kings Canyon solar project is a small sub-megawatt PV installation that’s already operating near Uluru – is the Coalition proposing connecting that up to the national grid?

The text above is then followed by a passage proposing that government play an ‘active role’ in construction of infrastructure to support an energy export industry:

Northern Australia is also positioned close to many South East Asian countries likely to have large energy demands in the future. That demand will create a market for the efficient export of energy to support these economies. With the right infrastructure, Northern Australia could be a significant energy supplier to its neighbours (both domestic and international), while meeting its own growing energy requirements.

Government, in concert with the private sector, can play an active role in supporting the development of a Northern Australian energy industry. This includes supporting the development of new energy infrastructure (such as pipelines and transmission lines) and streamlining legislation related to energy infrastructure development projects.

While gas could certainly be exported via liquefaction, what exactly do they have in mind for exporting the solar wind and hydro energy they also mention? Is the Coalition proposing to fund construction of transmission power lines to South-East Asia?

Also precisely what form of support will the Coalition provide for new infrastructure such as new power lines? 

The Copperstring transmission line failed to get up as a project because the private sector (in particular Xstrata) chose a cheaper option. There are some private-sector co-ordination issues involved in shared infrastructure assets such as major new transmission infrastructure that mean government could play an important role, as explained by the Grattan Institute in the report, No Easy Choices

But someone has to pay for it.

The Coalition says its number one priority is getting the budget back into the black. So where is this money going to come from to pay for new transmission lines across Northern Australia, or possibly even to south-east Asia? The Coalition is scrapping the Clean Energy Finance Corporation which could have been the perfect institution to evaluate and help bankroll such projects, if they made good economic sense.

A page later, the paper makes a case study of Rio Tinto Alcan’s upstream aluminium operations in Weipa observing that:

Opportunities for power intensive industries including minerals processing and mining in the North could be significantly enhanced by new and innovative energy projects which could provide affordable new sources of baseload power.

One wonders what new baseload power projects do they exactly have in mind and why does the government even need to be involved in such development?

In a prior leaked version of the Northern Development Plan paper it stated that funding might be “leveraged” from the Direct Action abatement fund, to support Origin Energy’s hydro project in Papua New Guinea. It seems government bankrolling a transmission line for Origin’s project hasn’t yet died, but this could eat up the entire Direct Action budget for the first three years.

Clearly the 2030 Vision for developing Northern Australia is a hazy vision at best. But what it does do is help the Coalition’s combat Katter’s populist thought bubbles with some of its own.

Since the hung parliament in 2010 Katter has enjoyed an increased national profile and popularity that stretches beyond his own northern Queensland seat. That popularity is such that it has inspired him to establish his own party, Katter’s Australian Party (KAP). 

Two KAP candidates won seats in the 2012 Queensland state election and federal senate candidate James Blundell is a genuine chance according ABC analyst Antony Green.

This paper is an attempt by the Liberal Party to counter Bob Katter with vague promises but frees them from any specific obligations.

One imagines that once Katter has been seen off, this Green Paper will be quietly strangled by an interdepartmental public service committee.