Earlier in the month, ETU National Secretary Michael Wright teamed up with Alison Pennington, Chief Economist at the McKell Institute to deliver an address to the National Press Club, launching ‘Sovereign Power’.
The plan for Sovereign Power was developed in conjunction with the McKell Institute, and in a 50-page report titled ‘Powering Australia’s Future’. The report calls for commonwealth-owned renewable energy production that will supply Australian heavy industry and manufacturing with cheap and reliable long-term energy contracts.
Australia needs heavy industry and manufacturing to ensure sovereign production capability and reduce reliance on foreign powers for essentials to our economy. Heavy Industry in Australia supports over 200,000 direct or indirect jobs, and tens of billions of dollars in economic activity, usually in regional communities across Australia. These aren’t just commercial enterprises; they are sovereign assets which uphold a lot of Australia’s industrial base.
But our heavy industry is struggling due to high energy costs. The ETU has been fighting against closure of places like Tomago, Whyalla, and Liberty Bell Bay, however the core issue that underpins all these sites is the high cost of energy. Without cheap, long-term energy solutions, our smelters, steelworks and refineries will continue to go under and require bailouts. Workers deserve long term security, and good, well paid union jobs and ensuring industry is supported is key to that.
The solution is Sovereign Power. Using the Commonwealths lower cost of capital, and a long term investment strategy, a corporate commonwealth entity could deliver clean electricity at prices that that make Australian heavy industry viable and competitive. It would put us in line with countries like Canada, Iceland, Norway and New Zealand, who all have similar schemes providing state-owned or partially-owned energy to domestic industry.
Benefits of Sovereign Power include:
- Reducing cost of renewables buildout due to lower cost of capital, reducing electricity costs to heavy industry.
- Builds public value by bringing generation assets onto public balance sheet and capital stock, lifting internal expertise in designing and managing system. Profits reinvested into new capacity.
- New tool for macroeconomic stability, protecting against energy price shocks, reducing inflation.
- Long-term coordination power combined with cheaper energy prices can turbocharge local industry and manufacturing, with significant benefits to local supply chains, jobs and skills. The ‘crowding in’ effect allows private investment to follow public investment signals.
- Supports the maturation and reduced costs of technologies critical to decarbonisation, which only accrue through long-term investment.
- Apprenticeships and skills pipeline can be better managed, securing good, high-paying jobs.