Why Can't We Have Publicly Owned Renewable Energy? [S2-07]

Show Notes

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Music: “Insurrection”
Written by Pierre Chrétien
Performed by the Soul Jazz Orchestra
Courtesy of Do Right Music Inc.

Transcript

link to podcast

18 June 2026

Glenn
Welcome to another episode of Why Can’t They Just, a podcast about politics, policy and getting stuff done. I’m Glenn Davidson and I’m a member of the Labor Party.

Janaline
I’m Janaline Oh, I’m also a member of the Labor Party. I’m a former diplomat and a current climate, environment and anti-racism activist.

Luke
I’m Luke Robertson, I’m also a member of the Labor Party, and I’m a conservation biology and environmental policy student.

Janaline
I’d like to acknowledge that we are all recording this on the unceded lands of First Nations people in Australia, recognising that sovereignty was never ceded, and to pay our respects to their Elders, past and present, and to any First Nations listeners that we have.

Glenn
In the 1980s, electricity systems were state-owned monopolies, built to deliver universal, reliable power as critical infrastructure. For the 20 years from the 1980s to the 2000s, many countries, including here in Australia, sold off state-owned assets to raise government revenue and move to a market-based approach. The argument was the competition would increase efficiency, investment and lower costs. But increasing market concentration has seen prices rise.

There’s also a challenge for the market in dealing with the scale, risk and coordination needed for decarbonisation, while price volatility and equity concerns persist. And now there’s a growing push back toward public or hybrid ownership of renewable generation and grids, which is seen as better suited to delivering long term investment, system planning and affordable clean energy. We are in a state of flux at the moment.

So Janaline, who actually owns Australia’s energy, who controls it and why are we in this position, and why is there a push for change?

Janaline
So energy is a state-based responsibility in terms of the ownership and operation of state-based electricity networks. Queensland still has public ownership, Tasmania has to a lesser extent. New South Wales and Victoria pretty much completely privatised, although Victoria recently re-established the State Electricity Commission, so it is now providing and funding publicly-owned electricity in the renewables space.

The privatisation of electricity in Australia really came at the tail end of the kind of Washington consensus, neo-liberal wave across the world, where there was this general view that markets are more efficient than government, that bloated public enterprises were just raising costs and being really inefficient. That may have been true for some things that were privatised, particularly in terms of - in some countries, the state owned manufacturing and all sorts of industries, that potentially were better off in private hands.

The issue with things like electricity, though, is that it is what you call a natural monopoly. So everybody needs electricity; you can’t choose not to use electricity. I mean, it’s highly regulated for a reason, because everybody needs it. The other thing about electricity is that you also need considerable scale, or at least, you did in the 1990s and early 2000s. I think the distribution of solar power to households has really changed that, with the technology. But at the time that these electricity providers were being privatised, electricity was very very centralised. You had these giant power plants, mostly run by coal, some run by gas, and they pushed energy out through transmission to households and businesses. Now when you privatise a market like that, it is very difficult to introduce competition into that market. And the thing that actually makes markets more efficient than governments is competition.

So if what you’re doing is basically handing a natural monopoly from the public sector into private hands, all you’re doing is creating a massive rent-generating opportunity for those private companies. And that is pretty much what has happened in New South Wales and Victoria.

Glenn
Yeah, so electricity is a homogenous product; there’s no product differentiation. Electricity is electricity. So really if you’ve got it in the hands of private companies who are ostensibly competing, all they’re competing on is the packaging, and their stationery effectively, what their bill looks like. And maybe a little bit on pricing, so there’s just not a lot of room for efficiencies. And we’ve seen that market concentration because you do need those economies of scale. So really, why do you think that was not apparent when there was that push to move to private markets? Certainly there was an attractiveness that you had all these public assets that you could sell off, raise money and offer tax cuts or other incentives for political reasons, but why was there not more of a pushback at that time to recognise the things you’ve just said about the natural monopoly character of electricity generation?

Janaline
Well I think you kind of hit the nail on the head when you talked about the political attractiveness of selling off these public assets, getting a lot of money in paper terms, that could then be delivered back in terms of public infrastructure, or tax cuts or whatever, which is what state governments did.

I think it should have been apparent. There were people at the time who were saying ‘well, these things are going to just become private monopolies instead of a public monopoly. And the way that the contracts were designed, particularly in New South Wales, were pretty egregious. Like, Transgrid, which took over the poles and wires, had a very very generous contract, which gave it guaranteed rates of return and all sorts of public goods were then privatised into profits for their shareholders. The major shareholder of Transgrid is a Hong Kong-based company owned by Li Ka-Shing, who is the richest person in Hong Kong, so it’s not even staying in Australia; these profits are going overseas.

But the only competition you can have is at the retail end. So when you talk about different labels on their bills, they can offer a little bit of competition at the service to consumer end. But that is within the context of a market - I mean, you can’t introduce competition into the poles and wires. I mean this is a giant network, highly technical, very difficult to maintain. And the main reason for the huge increases in electricity bills in the last 25 years has been basically what they call gold-plating of the transmission infrastructure. So they’ve put billions of dollars into upgrading the poles and wires, and that’s been the major thing that’s been driving up household bills.

Glenn
So Luke, young people consistently call for the government to prioritise renewable energy and take a bigger role in driving climate and energy action on the one hand, but then they’re generally sceptical and don’t trust governments and institutions to deliver. Do you think this is policy area that might stir the interest and engagement of young people?

Luke
Young people - I think that’s probably fair, there’s probably less trust in government than there was a period of time ago, but I think the trust for corporations would be much lower. And I think whilst there is a lot of scepticism around anything that is publicly owned, I think one thing that is pretty unanimous across all young people with different political views and beliefs is that there is a great deal of scepticism with privately owned corporations and particularly those which provide essential services like power, because, as you said, there is a monopolisation of the market. It is not - the competition from it has largely been removed.

Glenn
Yeah, that’s an important point to mention. And the other thing, if we go right back to the very beginning, we were talking about who actually owns Australia’s energy. We should differentiate between Australia’s energy and Australia’s power generation because they’re no longer the same thing. Previously it was the state that generated the electricity. These days, so many households have got solar panels on their roof and they’re generating their own electricity.

Now sovereign power is a new term that’s just come into play and it’s about governments or communities taking control of energy systems rather than leaving it to markets and foreign owners. It’s closely tied to energy sovereignty and the ability to align energy and national goals. In Australia, it’s been driven by state and federal governments with policies like Powering Australia, new public energy entities and moves to lock in public ownership of assets, especially in places like Queensland and Victoria, as you’ve just mentioned, Janaline.

Overseas, in countries like Sweden and Denmark and regions in Europe, they’re using public ownership to accelerate renewables and keep energy affordable. So fundamentally it’s a shift back toward state-led or publicly guided energy systems to deliver faster, more secure and more equitable renewable transitions.

So Janaline, at a time when communities and voters are losing faith in big government and government intervention in their lives, are the arguments for sovereign power resonating with voters?

Janaline
Yeah, I think what is resonating with voters is the idea that renewable energy can actually reduce your electricity bills. Now the Opposition spent most of the first term of this current Labor government saying ‘Look at your bills, they’re going up’, you know, ‘Labor promised you a $275 cut in your electricity bills and your bills are going up so that just proves that renewable energy is terrible for you’. Now obviously the bills went up partly because of the gold-plating of transmission systems that we just talked about, partly because the war in Ukraine shot up the cost of gas, which in Australia, as in many other markets, is the kind of indicator price, because the price overall tends to be set by the most expensive component, and so the war in Ukraine really had a big effect on energy prices.

What has happened, though, over the last few years, is that as we have seen this continued explosion of household solar and household batteries, largely initially driven by pretty generous subsidies by state and federal governments, I think that what people have seen with a third of households now hosting their own solar panels and approaching that number also having their own batteries, basically everybody knows somebody who has their own solar panels and a battery. And they can see how dramatically their individual power bills have dropped because of that. So I think this argument that renewable energy raises your power bills is actually not getting any traction any more because people can see the evidence that it’s clearly not. And I think the recent default market offer from the Australian Energy Market Operator which actually dropped power bills along the east coast by 5-10%, has kind of underlined that even for those people who can’t afford to have these systems, or because they’re renting or they’re in apartments or whatever, they are also seeing their power bills start to fall because of the amount of renewable energy in the system.

And this is the difference between the effect on the Australian energy market of the war in Ukraine in 2022, which led to a very significant spike in electricity prices, and the war in Iran in 2026, where the closure of the Straits of Hormuz did lead to a big spike in diesel prices and, temporarily, in petrol prices, but didn’t have that kind of effect on the electricity market. And the reason for that is, in 2022, renewable energy was less than 30% of the National Electricity Market, covering the east coast and South Australia, whereas in 2026, renewable energy accounted for more than half of the National Electricity Market. So we can really see the impact of renewable energy on Australia’s vulnerability to geopolitical shocks in the fossil fuel trade.

In terms of public ownership, I think it’s really important to look at the different components of the market. So, as we said just before, in the 1990s, the market was very much controlled by the generators and the generators were central large power plants. Since the 2010s, household solar has absolutely sky-rocketed and what that has meant is that Australia’s electricity system is now highly, highly distributed. So we’ve got literally millions of households essentially generating their own power and also helping to feed back into the grid and helping to stabilise the grid. So that really changes the nature of the market.

Now you talk about sovereign power. I want to give a really really big shout out to a proposal that was launched recently at the National Press Club by the Electrical Trades Union and the McKell Institute. And their proposal is for a specific, federal government owned and operated power company, based on renewable energy, that will specifically contract long term power to specific industries, so large industrial users.

Why is this an important distinction? Because they’re not proposing that it do retail power. They’re not proposing that it take over the market. They’re not proposing to crowd out private energy providers. It’s a very very specific proposal for the Commonwealth to take over power generation for those really big electricity users. And part of their argument for it is the example that we’ve seen with the government having to bail out some very significant industrial plants, like Tomago aluminium smelter, Whyalla steelworks. The reason they had to bail them out was because they could not get power at an affordable price. And the reason they couldn’t get power at an affordable price is that the private market doesn’t have the right incentive structures or the right financial structures to deliver that power in an affordable and reliable way to those major industrial users.

So I think this is a fantastic proposal, but I think it’s important to understand that they’re not proposing that the government take over all power generation, they are proposing that the government provide a power generation option specifically for large industrial users.

Luke
Yeah, heavy manufacturers, there are heaps in Australia that are really suffering the consequences of the cost-price squeeze that is potentially putting a lot of them out of business and we’re seeing a lot of very expensive bail-outs. But the proposal that the Electrical Trades Union and the McKell Institute have is something that would really pull a lot of these manufacturers, and any industry, it’s important to note in Australia that over a third of our power, 35%, is used by heavy industry. So they are big users of it and by not only just providing them with their own, as they say, sovereign power, to be able to power their own industry and separate sort of their grids from our grids and allowing them to have reliable low-cost power, that is helped by these very low borrowing rates that the federal government has, could be really important in ensuring that these manufacturing facilities and these heavy industries continue to exist in the future and to make them immune from a lot of the price shocks that we’re seeing and that we have seen in recent years with Ukraine and the war in Iran.

Janaline
So if I could just add to that, I think there’s a couple of really really good things that this proposal could deliver. I mean, all the stuff that Luke just said. But the other thing that Australia, or the current Australian government is trying to do is to transition our export dependence from fossil fuels, and basically in the form of extracting them, compressing them and shipping them overseas with very little processing, to transition the country into being what the Superpower Institute and the Minister for Climate and Energy, Chris Bowen, like to call a clean energy superpower. So the government has a very ambitious industrial policy called a Future Made in Australia, by which it is subsidising research and development, it’s providing production tax credits. It’s providing a whole bunch of incentives to encourage the development of clean energy industries with the hope that they will develop into the new export base for Australia to replace fossil fuels in a decarbonising world.

So essentially the government is betting very very heavily that the world is going to decarbonise. And Chris Bowen likes to say he doesn’t want Australia to be the Kodak of the energy market. So he says Kodak, which did very very well selling film in cameras and then was completely annihilated by the advent of digital cameras. So he is essentially betting that, as the world decarbonises, he says he doesn’t want Australia to be a fossil fuel exporter, he wants Australia to be an energy exporter, and in the modern world that means a clean energy exporter. So they’re putting a massive amount of investment into things like green hydrogen, into green metals - green iron and green steel - all of which is processed without the use of fossil fuels. And all of which requires an absolutely gargantuan amount of energy and, if it is actually going to be green then that energy needs to be renewable.

So this sovereign power proposal, specifically for those sorts of industries, actually gives them a long term affordable power contract on which they can base their business plans. So they can actually create their business plans on the basis of knowing what their power is going to cost them over the next fifteen to twenty years, which is the kind of investment horizon that they need.

The other thing that I think this proposal can do, and is certainly one of the explicit aims of the Electrical Trades Union in supporting this, is it can help to fill the skills gap. So Jobs and Skills Australia estimated in 2023 that we would be 42,000 electricians short of a transition by 2030. That is a big, big number. Part of the problem with apprenticeships in the electrical trades is that renewable energy projects take between two to three years to construct and get going. An apprenticeship is four years. So it’s very very hard to persuade a young person to go to some part of regional Australia to do half or three-quarters of their apprenticeship on a project and then not have a guaranteed job for the final year. So what this sovereign power entity could do, is it could actually provide that certainty. So when it builds a renewable energy facility and that only takes two years, the apprentices that it’s hired can be redeployed to another sovereign power facility, either nearby or somewhere else, that will take the rest of their apprenticeship. And then hopefully subsequently put them in a position to get a permanent job at the end of it. And in any case they will have acquired those skills and so they can then go and get a job in the private sector.

So I think one of the really important parts of this proposal is its capacity to help to plug that skills gap, because this institution will hopefully be in a position to provide security, decent conditions; the kinds of things that you need to attract young people into a trade.

Glenn
So this sounds like an excellent initiative and it seems like it’s something that, if not contained, it’s certainly got fairly clear parameters around it. It’s about government investing in that long term infrastructure investment that doesn’t return an immediate profit for a private company and that works well for big industry. We’ve got the domestic end, if you like, with a lot more households with solar on their roofs and a growing proportion with batteries. But I’m wondering if there’s not an inadvertent risk here in the middle, that firming power for when the sun doesn’t shine or the wind doesn’t blow as we keep hearing about, for all of those industries and businesses and consumers that are not part of the sovereign power initiative that you’ve been describing, and don’t have their own homes, their own solar panels, their own batteries. Is there a risk there that that power generation or electricity generation capacity within the market doesn’t necessarily fall over but doesn’t get the economies of scale and the income that they would otherwise get if they were also supplying large industries.

Janaline
Yeah, so at the moment, the private market is meeting those needs reasonably effectively and the government also has a thing called the Capacity Investment Scheme where they do have things like guaranteed minimum prices to ensure that the private market can deliver the firming that is required to make sure things don’t fall over. I mean one of the things, at the risk of over-quoting the Minister for Climate and Energy Chris Bowen likes to say is yes, when the sun doesn’t shine and the wind doesn’t blow, then you don’t generate electricity at that moment, but when the rain doesn’t fall, you also don’t have water falling down at that moment. What do you do? You build storage. The rain doesn’t fall all the time on Australian agricultural land, but it doesn’t dry up because, guess what, we have water tanks and dams.

So batteries are one of the ways, and a very important way of ensuring that we have that storage capacity. Batteries tend to be shorter term, so we are now developing longer term storage options. So Snowy Hydro - famously expensive, over budget - but the purpose of Snowy Hydro is actually to be an absolutely gigantic battery to store energy, and that is long term storage of energy. There are other technological advances that are coming into commercialisation, on heat storage, salt-based storage. There’s all sorts of technological potential there. And at the end of the day, we will probably still have a small amount of gas in the system to firm up the grid on those occasions where you’re not generating for while, your storage runs out, yes you can fire up a little gas-fired power plant. And the beauty of using gas for that is you can turn it on and off very very quickly and you don’t have to use it all the time for it to function. So this is the difference between gas and coal, and the difference between gas and nuclear. You can’t just turn a coal-fired power plant or a nuclear power plant on and off. You can turn gas on and off.

Glenn
Anything from you, Luke?

Luke
I’d just like to touch on how the proposal interacts, or is designed to interact with some of our existing mechanisms for investing in renewable energy. We have in Australia, the Clean Energy Finance Corporation, it’s I think the largest green bank in the world. It’s designed to help de-risk projects like the Capacity Investment Scheme and it takes a minor equity stake in projects. Now of course the intention of taking an equity stake in the project is to allow that money to be given back, right? It’s to generate, if not profit, then at least break-even in the investment that has been put in there in the first place. So contrasting that with the sovereign power proposal - the point of the sovereign power proposal is to not have any profit at all. And so that the private market, which, as you pointed out, is already servicing households and businesses and any other regular user that isn’t heavy industry, this sovereign power serves the same purpose in derisking projects by providing them the financial stability for energy costs that they need going forward.

Glenn
So it seems the argument, while very compelling on one level, is not yet conclusive on whether sovereign power works in all situations and all contexts. It seems the evidence is mixed overall. Publicly owned power generation can deliver lower prices if it’s well run, and can re-invest profits locally instead of paying shareholders, and they may be better at long term planning and scaling renewables because they’re not driven purely by short term profits. But it all comes down to governance and good policy, which is really what this program is all about. Poorly run public systems can be inefficient and there’s no one-size-fits-all model. So it seems people can potentially be better off through lower costs, more stable energy and public benefit, but only if the public system is well-designed, accountable and properly managed.

So Janaline, is the debate about public versus private or it is about who carries the risk and who benefits and how do we ensure that the policy framework around this is robust and delivers what it’s supposed to?

Janaline
I mean all of those things are right: there have been many many examples of publicly owned utilities being disastrously bad. There are also many examples of privatised utilities also being disastrously bad. But I think the thing about this proposal is that it’s not proposing to be a publicly owned utility for the entire country. It’s proposing to be a publicly owned electricity generating option for a very very specific part of the market that is currently not being adequately served by the private sector. So I think that’s an important distinction.

What you say about being well run and not being well run is completely valid. One of the things that Michael Wright, the National Secretary of the Electrical Trades Union, has said is ‘yes that is true, but what you’re really talking about here is a bunch of panels and a battery’. It’s not that complicated. It’s not like a coal-fired power plant. The complexity of running these things is significantly reduced just because of the nature of the technology. And I think wind power is a little bit more complicated, but it’s not dramatically more complicated. It is not like nuclear power or coal power.

So I think the concerns about potential inefficiencies in the way that it’s managed are valid and should be taken seriously, but that is more of a kind of administrative, governance issue than the plants potentially not being technically run very efficiently. Administrative governance of course is very important. One of the things that this McKell proposal suggests is a very significant degree of transparency about that. And as a Commonwealth entity, its executives would have to front up to Senate estimates. They would have to be subject to pretty intense public scrutiny. And I think they would be, because it is such an important thing, because it is dealing with an important part of the economy. And because frankly it is politically very very contentious and I’m sure that there are a lot of people on the Opposition benches who would love to uncover corruption and mismanagement in a publicly owned electricity corporation.

Glenn
So if all of this was to go ahead and we’ve got all of this investment in, even if it is just panels and batteries, and a governance structure that is going to run under the current government’s structure, and we get to 2028, and, if we’re to believe the polls, Prime Minister Pauline Hanson is going to say ‘we don’t want this, we can sell this off, we can make some money and we can build dams in North Queensland or something. What’s to stop that from happening?

Janaline
At the end of the day governments will make their choices, right? And elections have consequences. I think if the government were able to set this up, there is a certain amount of investment that has to go into these things and it’s not that easy just to unwind it. Snowy Hydro was a Malcolm Turnbull initiative. I think if you were designing it now you probably wouldn’t do it and you probably - you certainly wouldn’t do it in the way that it was done. So there are lots of ways in which changes of government can undermine things and pull things back, but there’s also a limit to how much that can happen quickly.

And, importantly, this would require a legislative change, so this would require its own stand-alone legislation. Now if Prime Minister Pauline Hanson wins a majority in the House, or goes into coalition with the rump of the Liberal and National Parties, to take power in the House of Representatives, it is still highly unlikely that they would command a majority in the Senate. And so they would have to repeal the legislation in order for it to fall over completely.

And that is in fact the reason that we still have a Clean Energy Finance Corporation and an Australian Renewable Energy Authority, because Prime Minister Tony Abbott, when he came in with a thumping majority in the House of Representatives in 2013, was not able to repeal that legislation.

So there are ways in which facts on the ground can actually protect you from - I mean, governments do stuff. And as stuff rolls out, future governments may roll it back. I mean they can do a lot to roll it back. I mean, look at the Queensland government: after three terms of Labor, the LNP has, in half a term, basically almost destroyed all of the renewable energy projects that hadn’t already started construction and operation.

So yes a change of government could have a significant impact, but you can’t insulate yourself from changes of government. I mean that is the point of a democratic system. The people do choose.

Glenn
Yeah, no you’re right, you can insulate from those changes of government and the fickle nature of the voters from time to time. And you also can’t rely on the dysfunctionality of the system, if we can call it that, where you don’t have a majority in the Senate, or you’ve got various coalitions of parties working in your favour by trying to work against you but not being able to do that. But are there aspects of the governance, given that we’re starting something brand new here, there’s a chance to start with that blank sheet of paper. Are there some governance arrangements that can be put in place that reduce, or build a sort of a barrier, if you like, to those sorts of fickle changes and changes for, you know, just crass political reasons?

Janaline
I think we’ve learnt a lot about how to design public institutions to improve accountability, to improve efficiency and to run effectively. So I think over the years, of setting up all sorts of things from the Reserve Bank to the Australian Securities and Investment Commission to the Clean Energy Finance Corporation. All of these are public institutions. They all run according to different governance arrangements, and I think it is incumbent on governments to look very closely at how they design these institutions to ensure that there is transparency and accountability. And one of the key things is actually to look at a review, a regular review. Now again perhaps that makes you more vulnerable to a change of government down the track, but I think hopefully it also makes the institution more robust.

And the other thing about these institutions is that, as they gain public trust, they become very hard to shut down. Look at the ABC. Various Coalition governments have tried to shut down the ABC for decades and decades. Medicare: the Fraser government actually did shut it down, but then when the Hawke government reinstituted it in its current form, successive Coalition governments could not shut it down, even though they tried. Even though they tried to erode it, they could de-fund it, they could do all sorts of things but they couldn’t shut it down. Why? Because they are tremendously popular. Because people love them. So I think one of the really important things for these institutions as they are established and they start running, is actually to generate that public trust. Because if they do become a trusted and loved institution, then no government is going to close them.

Glenn
Luke, so you’re here at the beginning of a big new idea. If you can project yourself ten or even twenty years into the future, by which time you’ll be mid-career, what do you think success looks like for this initiative?

Luke
I think you’re right in that there could be some administrative challenges, so I think success would be to have it managed well, and actually have low power prices. Obviously, that’s one of them, as they said, $66 per megawatt hour, adjusted for inflation, who knows that that’d be in ten years’ time. But the decentralised nature of renewable energy, compared to fossil fuel production, whilst I think Janaline you’re right in pointing out that it is much easier to put solar panels in there. I think that having a strong industrial base that not only is supporting existing industry, but also supporting new industry, particularly in things like critical minerals, where just sending them off overseas is not a particularly wise business model for Australia in the long term. I think success would definitely be having renewable energy and being able to reduce our reliance on a lot of the fossil fuels that we have, like coal and gas that are contributing to a lot of price rises, particularly as they get older and older and older.

I often think and laugh about, I’ve forgotten which coal-fired power station it was, but one of them, I think it was in Victoria, literally blew up, and Matt Canavan, the leader of the Nationals, his response was ‘oh that’s why you can’t trust renewable energy because otherwise we’d have to rely on that’, you know, in the face of a coal-fired power station literally blowing up. Anyway, the risk that comes with fossil fuels is much higher.

Janaline
Yeah, look, I think you’re right, Luke. For me, I reckon success would look like there is a successfully running sovereign power company, that government owned entity, that is providing reliable and affordable power to heavy industry in Australia. Success to me also looks like we have succeeded in transitioning our export profile from principally unprocessed fossil fuels to value-added, processed critical minerals, green hydrogen, green metals.

The other risk of having such a commodities-based export profile as we have in Australia, is that we’re very very vulnerable to the fact that there is only one country that can actually take the volume of unprocessed Australian minerals and turn it into stuff, and that is China. And when Labor came into government in 2022, China was our biggest trading partner and it not only was our biggest trading partner, it was bigger than the next six trading partners put together. That is a massive dependence. And the reason for that is because - iron ore and coal. So only one market could take the volume of Australian iron ore that we were shipping out and actually turn it into anything useful.

If you take that iron ore and you process it onshore into green iron, and even more so if you process it into green steel, that massively expands the markets that you can send to. So, while only one country can take that quantity of iron ore and process it, many many many countries use iron and steel and can buy that directly from us. And so it also helps to diversify our trade profile, and it also helps frankly to shore up our national security, because it reduces our vulnerability to a single giant market. So there’s lots and lots of reasons for doing this, and I think the success, if the government were to implement this proposal, and I genuinely hope they do, then I think success looks like the transformation of the Australian economy into a major contributor to decarbonising the world.

Glenn
OK, we’ve traversed a lot of ground today and covered some really big ideas that will fundamentally change the nature of our energy and power generation in Australia if it comes to fruition, and quite fundamentally change what we can contribute on the world stage and the nature of our trading relationships with a number of other countries. But time has come to an end for us, so do you have any final comments you’d like to make, Luke?

Luke
Yeah, I think it’s really important to note the role that sovereign power is playing in our market grid. I’d just like to read this quote about the role that sovereign power plays and the proposal in which it will play. This is a quote from the McKell Institute.

‘It does not compete with private market participants, it fills a gap where the private market fails, rather than reproducing the aims of de-risking investment through the current Capacity Investment Scheme’.

So I think it’s really important to note that this is designed for industry to help industry to have the certainty that they require for us to maintain a manufacturing base that can be globally competitive.

Glenn
And Janaline.

Janaline
Yeah, I mean all the things that Luke said, but also I think one of the fundamental concepts behind this is that electricity is a very fundamental input into any kind of economy, any kind of system. It’s been a long time since you could run any kind of economy without electricity. So I think it is really really important that we look at electricity in that context. And we look at:Ω what do we actually need to have a solid, sovereign capability underpinned by a strong industrial base.

The McKell report notes that there are three critical inputs in that. There’s labour, so yes, we have a domestic labour force. There’s material inputs. So yes we have critical minerals, we have the things that we need to use, we have iron ore, we have the things that we need to process into other stuff. And the third component is energy. And increasingly, in a decarbonising world, that’s going to be electricity. And it’s going to be renewable electricity. We have colossal, abundant, renewable electricity potential.

I think the value of this proposal is that it actually creates a vehicle to enable us to channel that abundant renewable energy potential into a form that can be delivered affordably and reliably to create that kind of sovereign industrial capacity that we need into the future.

Glenn
That wraps another episode of Why Can’t They Just? Our theme music for this podcast is a piece called Insurrection by Pierre Chrétien, performed by the Soul Jazz Orchestra, courtesy of Do Right Music Inc. I’m Glenn Davidson.

Luke
I’m Luke Robertson.

Janaline
I’m Janaline Oh, and this is Why Can’t They Just?