The AFR View
High price of energy failure
The Financial Review’s take on the principles at stake in major domestic and global stories.
Bad policy begets bad policy. The Victorian and federal government's new handout to Alcoa's Portland aluminium smelter is just papering over the consequences of another policy failure in energy.
The $240 million, four-year deal between the Victorian and federal governments, Alcoa and its energy supplier AGL is dressed-up "compensation" for the skyrocketing energy prices the aluminium plant is now exposed to after its last sweetheart energy deal with the Victorian government ended late last year, and the coming closure of the Hazelwood power station in March. Power prices in Australia are high by global standards – robbing us of our traditional advantage of cheap, abundant energy – because of the botched energy policies of both federal and state governments. Instead of addressing their own energy policy problem at its cause, the political response is to pay off the people damaged by it.
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