Why Labor should consider the public ownership of renewable energy

Felicity Wade is the National Co-convenor of the Labor Environment Action Network

Over the last months, LEAN in Queensland has been campaigning - with the support of the Electrical Trades Union - for public investment and ownership of renewable energy. This campaign gathered huge support across the rank and file in the lead up to Queensland Conference in late July.

It is LEAN’s contention that Labor needs to think more carefully about how we transition to renewable energy. Electricity powers the economy. Retooling the electricity system away from greenhouse gas intensive coal fired generation to cleaner sources is a major reform. And the way we do it matters. It cuts to the core of Labor’s values and mission, especially at this point in history where market fundamentalism is under question for the first time in a couple of decades.

The last time Australia built an electricity system, governments did it. 

The wires, big and small and the central coal fired turbines that created the electricity was an integrated system run by state owned statutory authorities.

And even though the Party has broadly agreed that electricity is an essential service best delivered by the public sector, most current renewable energy policy across both the state and Federal party facilitates private ownership of renewable energy – often with tax payer subsidies to grease the process. This is effectively privatisation of the electricity system by stealth.

Why should Labor be considering public ownership of renewables?

The National Electricity Market (NEM) is failing. During the heights of the utopian neo-liberal dream in the 1990’s, the electricity sector was bundled up in Fred Hilmer’s vision and state owned systems dismantled, made into a national market system with a complex mass of regulators to manage it all.

The NEM is failing to deliver better prices, services, reliability and failing to deliver a smooth transition to a renewable future. It is the perfect case-study in why corporatised, competition driven delivery of natural monopolies to deliver key services doesn’t work. The need to retool only amplifies the problems.

Secondly, the market is not good in a crisis and climate change is a crisis. We need to transition fast and carefully. This is best done by the public sector. The state should plan, invest and serve its people with a speedy transition that benefits all. And of course, the state can borrow cheaper than the private sector to keep prices down.

Thirdly, retooling our electricity system should be an opportunity to create jobs and industries. Stories abound about the crappy conditions on solar and wind construction sites. Why shouldn’t we use this huge infrastructure building task to create jobs and industries in places that need them? North Queensland has some of the best solar resources on the planet. Free fuel that can support new and diversified industries. The state needs to think about how it maximises the possibilities of this re-build.

Fourthly, publicly owned electricity delivers dividends. In Queensland publicly owned electricity delivers over $2 billion a year for schools and hospitals, more than mining royalties. If we leave it to the private sector to build the new electricity generation, we forfeit this funding stream.

The Campaign

LEAN members fanned out across the vast expanse of Queensland, with over 100 local branches from Brisbane to Mackay to Cairns all supporting the call for Queensland to build 3 gigawatts of renewable energy and supporting storage in Northern Queensland.

The campaign alliance between the Queensland ETU and LEAN was powerful and respectful. It felt like Labor at its best - creating an Australia both progressive and egalitarian.

The idea was new and hard and cut across orthodoxies that have driven electricity policy for most of a generation. However the conversation and outcomes were positive, the first step in a longer discussion. In her speech to the Conference Premier Palaszczuk said, “Through our commitment to publicly owned power assets, we are looking to establish a ‘Clean Co’ Government owned corporation to operate a growing fleet of renewable generators. We will also encourage the existing Government-owned generators to diversify into renewable generation.”

LEAN does not pretend to have all the answers about how we “unscramble the egg” of the legacy of market fundamentalism and our failing National Electricity Market. Internationally respected economist, John Quiggin, has recently called for the re-nationalisation of the entire system. LEAN’s campaign in Queensland makes a rather more modest demand – that the public sector remains a player in electricity generation as we shift from coal to renewables. And in the process the government use its market power to maximise outcomes such as developing industries, planning for maximum job outcomes and for ensuring prices are kept under control.

NSW Leader, Luke Foley and NSW Conference have supported LEAN’s call for public investment in renewable energy generation in NSW as well, committing to re-deploying some of the funds generated by the sale of the Snowy Mountains Scheme to the Federal Government into creation of new publicly owned renewable energy in regional NSW.

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