The Federal Opposition has doubled down on energy as an election battleground, pledging to include gas in the Capacity Investment Scheme by adding new annual auction categories for new and existing gas capacity.

The policy announcement adds to Coalition plans to build seven nuclear power plants nationally.

In a speech to the Australian Pipelines & Gas Association Convention in Adelaide, the Opposition Shadow Minister for Climate Change and Energy Ted O’Brien said the Federal Government was putting “all eggs in one basket for our energy future, one which is simply defined as a renewables-only approach”.

“No other nation on the planet has embarked on a path to decarbonise which is as radically ideological as that which this Labor Government is pursuing,” he said.

The Capacity Investment Scheme provides a national framework to encourage new investment in renewable capacity, such as wind and solar, as well as clean dispatchable capacity, such as battery storage.

Under the scheme, the Government will provide revenue underwriting for successful CIS tender projects, with an agreed revenue ‘floor’ and ‘ceiling’.
This will provide a long-term revenue safety-net that decreases financial risks
for investors and encourages more investment when and where it is needed.

“If we are to avoid becoming poor, weak and dependent … we need reliable access to affordable gas,” Mr O’Brien said.

“A Dutton-led Coalition Government will include gas in the Capacity Investment Scheme by adding new annual auction categories for new and existing gas
capacity,” Mr O’Brien said.

“Upon coming to government, we will determine the amount and timing of capacity to be called for under each category, as well as the structure of the
contracts which will be awarded to successful bidders.

“These contracts will include bidding obligations to ensure that the reduced commercial risk of participating in the Capacity Investment Scheme is passed on
to consumers in the form of lower electricity prices.

“And there will also be availability obligations for gas generators which, if not met, will attract penalties.”

Climate Change and Energy Minister Chris Bowne, in an interview with the ABC, said the Opposition plan had “massive gaping holes in it”.

“Gas peaking has a role to play (in the power supply),” he said. “Our policy is renewables and government support for renewables to get to 82 per cent
backed by batteries, backed by storage and with gas peaking in a system.

“But gas peaking does not need Commonwealth Government support, a government intervention to support gas, existing gas. Gas, which is already in the
system, which is what Mr O'Brien said, just makes no sense. He's making it up as he goes.

“He said it will apply to existing gas. Well, why is he going to provide windfall gains potentially to people who are already in the market?

“The Capacity Investment Scheme is about bringing new energy supply, which is about what we so desperately need, not providing windfall gains to people
who are already there.

“Gas is much more expensive to bring on than renewables. So, how is it going to win auctions unless he puts his finger on the scales and pushes it towards gas?

“Gas has been included in the NSW scheme for years and has never won a single auction because it's very expensive compared to renewables.

“The Liberal party believes in ongoing fossil fuel subsidies for gas from the Federal Government. The Labor party does not… The next election is a choice between
Mr Dutton and Mr Albanese. Mr Albanese will have a plan to continue on the path to get to 82 per cent renewables. Mr Dutton will bring in nuclear and ongoing
support, Federal Government support for gas. That's a clear difference.”

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