Former Victorian Premier Matthew Guy privatised Victoria's energy network. However, the current Premier Daniel Andrews plans to 'bring back' the government-owned electricity commission after prices have gone up over the last decade. Mr. Andrews is now claiming this policy will serve to "keep the lights on - and bills down".
The state Labor government said it will spend $1 billion to develop its renewable assets as it has announced tough new emissions targets. The state will invest directly to control energy projects, including wind and solar with an expected focus on its ambitious offshore targets. With a plan to have a controlling interest in their renewable projects, they seek to put any profits into keeping bills down. In line with their energy-conscious policies, they aim to have 95% renewable electricity by 2035 and net-zero emissions by 2045.
These new targets have been welcomed by environmentalists and unions but those in the energy sector are not pleased. Jeff Dimery, CEO of Alinta Energy which owns the Loy Yang B coal power station in Victoria's La Trobe Valley, which was scheduled to close in 2047, said the move would force the early retirement of its coal power station and cost jobs, leaving his employees "shocked" (Financial Review, 2022).
The announcement will inevitably chill private investment even though Mr. Andrews has not provided further specifics. There has been a whirl of criticism levied at the government for taking this step. This is especially considering that publicly listed energy companies have already written off $11.5 billion of shareholder value due to market uncertainty over the last five years. This shift also has the potential to further punish shareholders who have invested in the energy sector with a vision of long-term faith in the companies.
While Mr. Andrews is operating under the notion that this step will provide "lower bills", exactly how this will be achieved is yet to be released. He has, however, already blamed many private energy companies for pocking billions in profits and he, as the government, would use these extra funds to keeping power bills down.
The Victorian Premier has been confident in re-gaining government control of the energy network. He released a PwC analysis that found his plan would generate 60,000 jobs by 2035. Yet, the comparative jobs lost as a result of his plans is perhaps the more important question.
A greener top-down sweep of Victoria is likely if Mr. Andrews can retain his position. Is the government justified in taking back control?
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