Trevor St Baker says deputy governor’s speech warning of risks to Australia’s economy is ‘totally inappropriate’
— The coal baron and Liberal National party donor Trevor St Baker has blasted the Reserve Bank deputy governor, Guy Debelle, for sounding the alarm on climate change, branding a significant speech on Tuesday warning of risks to Australia’s financial stability “totally inappropriate”.
The politically connected founder of the business electricity retailer ERM Power, who has approached the Morrison government to underwrite new coal developments in Victoria and New South Wales, including a high-efficiency plant on the site of the AGL-owned Liddell power station, told the ABC on Wednesday Debelle’s intervention was out of order.
The RBA deputy governor on Tuesday noted businesses and policymakers needed to consider climate change as a trend and not a cyclical event, and said climate change-induced shocks to the economy would be “close to permanent” if droughts were more frequent and cyclones happened more often.
St Baker responded by suggesting Debelle lacked technical understanding of how the electricity market worked. He said Australia was a world leader in the uptake of wind and solar, and declared “wind and solar cannot support an electricity supply system’s voltage and frequency”.
“The Reserve Bank governor, the speeches they are making, are totally inappropriate,” he said. “The fact is in an island community, you must have at least 50% at any time of the electricity demand being supported by what we call synchronous generation, that is 24/7 power: nuclear, gas, coal-fired, or baseload hydro.
“We don’t have any of those except coal as an economical source that we build a business on, and for the Reserve Bank governor to be entering the debate now, at a time when we have university students supporting, schoolchildren supporting, a strike to go 100% renewable in Australia by 2030 – it’s just part of the problem – especially at election time”.
In a separate interview on the ABC, the resources minister Matt Canavan – who has been a forceful advocate inside the government for new coal developments – also defied recent comments from Scott Morrison, declaring there was a “clear need for additional power in north Queensland”.
Morrison said earlier in the week the government was not contemplating coal plants in Queensland – which is what a number of Queensland Nationals, including Canavan, want – because a new plant would never be approved by the state government.
Canavan told the ABC: “There is a clear need for additional power in north Queensland, multiple studies have shown that, and those studies come back always saying that a Hele [high efficiency plant] or a new coal-fired power station would make a lot of sense in north Queensland”.
St Baker’s company signalled it was interested in buying the ageing Liddell plant in 2017 when the then prime minister Malcolm Turnbull publicly castigated AGL, the plant’s owner, for wanting to close the facility in 2022 and replace it with a combination of renewables and gas. But despite the sustained political pressure, AGL has shown no interest in selling the asset.
After growing frustration with energy companies, the government last year produced the so-called “big stick” package which created a power to break up energy companies if they engaged in price gouging, which some energy experts have long suspected was a mechanism to remove Liddell from AGL’s ownership.
The government was forced to pull the package because it would have to cop a Greens/Labor amendment in the House that would prohibit taxpayer support for new coal-fired power. But rebel Queensland Nationals want it back on the agenda before parliament rises.
While Liberals in city seats remain concerned that the government risks losing the coming election, at least in part, because of its record on climate change, Nationals are keeping up the pressure for new coal developments.
The energy minister, Angus Taylor, has confirmed the Morrison government is continuing to assess new coal-generation projects despite pushback from moderate Liberals, but he says taxpayers will only support projects that are “viable”.
St Baker told the ABC on Wednesday he had brought three potential projects to the government for taxpayer underwriting – a pumped storage project in South Australia, coal projects in Victoria, and a replacement power station on the Liddell site in New South Wales.
St Baker said he believed replacing Liddell with a new high-efficiency plant “using all that infrastructure” was the “best solution” if Liddell had to close. He said the projects would be 70% debt financed and 30% equity.
He said the government had indicated if projects could secure commercial and industrial customers on five-year contracts it would provide a taxpayer-backed guarantee for the project.
Taylor told Guardian Australia on Wednesday the government would only back projects that were “viable”. Nationals have demanded the government support projects whether they have a compelling business case or not.
by Katharine Murphy | The Guardian