THE Berejiklian and Morrison governments are close to outright war over energy policy, with NSW Energy Minister Matt Kean the target of Canberra's ire after Delta Electricity knocked back an $8.7 million Vales Point turbine upgrade grant after it had been announced.
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Federal Energy and Emissions Reduction Minister Angus Taylor said yesterday that it was "disappointing that Delta has been unable to progress this important project that would have delivered additional reliable capacity while reducing emissions".
"Households and businesses in NSW can't afford energy policies that put at risk investment in existing and new reliable generation needed to keep energy prices low and the grid secure," Mr Taylor said in a reference to the NSW government's "energy roadmap" policies and the Electricity Infrastructure Investment Act, which came into force in December.
Responding, Mr Kean dismissed assertions of "investment uncertainty", saying "the private sector has announced investment in 2400 megawatts of batteries and a new pumped hydro project in NSW" since the roadmap was announced.
Its stated aims include encouraging $32 billion in private sector grid investment by 2030.
"The NSW Government has invested $47 million for capital grants for dispatchable generation in NSW which can be delivered before Liddell's closure and has underwritten the QLD-NSW interconnector, which will provide an additional 190MW of dispatchable supply to NSW," Mr Kean said.
Households and businesses in NSW can't afford energy policies that put at risk investment in existing and new reliable generation needed to keep energy prices low and the grid secure
- Federal Minister for Energy and Emissions Reduction, Angus Taylor
The two also clashed over gas-fired generators, with Mr Taylor saying it was important that "good projects like Energy Australia's and AGL's gas projects [in the Illawarra and at Tomago, respectively] are developed and supported in the new NSW policy".
Mr Kean fired back, saying: "On the EA and AGL gas generators, Angus Taylor's comments are entirely at odds with his own Underwriting New Generation Investments (UNGI) program, which excluded those gas generators from participating."
The UNGI program was unveiled in late 2018 and was the fund from which Canberra announced it would contribute $8.7 million towards the cost of a Vales Point turbine upgrade.
Yesterday, Delta wanted no part of the growing dispute between two Coalition governments.
It had issued a statement on December 14 saying it would not proceed with its UNGI application.
It was an an "initial expression of interest", lodged in early 2019, that the federal government had revealed at its October 2020 budget.
The federal grant to Delta had been quickly slammed by the renewables lobby and other critics of the federal government's energy stance.
"Basically, the government is using taxpayers' money to pay for work that will allow a private company to pollute for longer," the Nature Conservation Council said in a typical response at the time. "It is scandalous."
Asked about the dispute, Delta yesterday referred the Newcastle Herald to the December statement, in which Delta managing director Greg Everett said: "Unfortunately, the timing of the UNGI funding application process and the placement of contracts do not align.
"Given the forward market outlook, the nominal closure of Vales Point in 2029 and proposed changes to electricity industry policy settings, the project is not economically viable without certainty around the UNGI funding."
The National Electricity Market is regulated and overseen by a range of federal and state bodies with influence on "policy settings".
Delta Electricity is owned by two coal industry figures, Trevor St Baker and Brian Flannery.
Since the Roadmap was announced, the private sector has announced investment in 2,400MW of batteries and a new pumped hydro project in NSW NSW Minister for Energy, Matt Kean, responding.
- NSW Minister for Energy, Matt Kean, responding to Mr Taylor
Late last year the usually reticent Mr St Baker was quoted in national media in the wake of the "renewables roadmap" policies, criticising it as "a gigantic intervention into the electricity market in NSW" that would "have investors seeking legal redress against the [NSW] government".
But Delta's December statement also took aim at Canberra, saying although the turbine upgrade was not until scheduled until 2022, "contracts needed to be placed now given the size and complexity of the project".
Vales Point at the southern end of Lake Macquarie has two 660-megawatt turbines.
Delta says it will start upgrading one unit in April at a cost of more than $20 million.
The UNGI subsidy would have gone towards the same blade replacements in the second turbine.
Each upgrade was the equivalent of an extra 30 megawatts of output: or the same output, using less coal.
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