Victoria’s ‘Back to the Future’ announcement a retrograde step

The Victorian Government’s election platform to reinstate the State Electricity Commission and expedite the exit of coal plant from the state will damage market and investor confidence and ignores the lessons of history, according to the peak body for energy retailers and generators.

The Australian Energy Council’s Chief Executive, Sarah McNamara, said the surprise announcement contains little detail but looks likely to chill private investment and see Victorian taxpayers carry the lions’ share of risk around new generation.

“Our members have announced billions of dollars of investments to support the Victorian and Australian energy transition. Today’s announcement will destabilise future investment plans.

“Publicly-listed energy companies have already written off $11.5B of shareholder value due to market uncertainty over the past five years. This announcement has the potential to further punish shareholders – including mum and dad investors – who have invested in the transition in good faith.

“Government shouldn’t need to make direct energy investments where the private sector has demonstrated it is ready and willing to do so. The money being committed by the Victorian Government is funding that could be more effectively deployed elsewhere.

“The AEC also rejects the suggestion that the privatised industry has not served Victoria well. Energy privatisation was a key part of the state’s economic and fiscal recovery from its severe 1990s recession and delivered $22.5B (1997$) of much needed capital, which enabled the development of a more reliable and innovative industry for the benefit of all consumers,” Ms McNamara said.

About the Australian Energy Council

The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. AEC members generate and sell energy to 10 million homes and businesses and are major investors in renewable energy generation. The AEC supports reaching net-zero by 2050 as well as a 55 per cent emissions reduction target by 2035 and is committed to delivering the energy transition for the benefit of consumers.