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Climate talks cast shadow over Turnbull

AAP logoAAP 8/12/2016 Paul Osborne, AAP Senior Political Writer

Nirvana's Kurt Cobain once sang: "With the lights out, it's less dangerous ..."

But Malcolm Turnbull is discovering the dangers of the lights being out, especially in South Australia and Victoria.

The prime minister faces a perfect storm when it comes to electricity prices, blackouts and climate policy.

SA was hit by what is known as a "black system" event on September 28 and an unrelated series of power outages on December 1.

The state relies heavily on the uninterrupted service of the transmission network that connects it to Victoria.

The blackouts were not only unwelcome by families and businesses but sent shock waves across federal politics.

But the issue has gained momentum this week before the release of a report by chief scientist Alan Finkel and the bungled handling by the government of a coming review of its "direct action" climate policy.

Finkel was commissioned by the government to put together a national blueprint on energy security and reliability.

The Australian electricity market is going through rapid change, with more renewable energy going online, thousands of megawatts of "old" generation being taken offline, prices under pressure, rooftop solar gaining in popularity and consumer demand changing.

Renewable energy is necessary to address carbon pollution, but also presents a challenge in terms of reliability of electricity supply and the cost for businesses and consumers.

The climate change policy highway is littered with the bodies of political leaders.

Turnbull lost the Liberal leadership in 2009 over his support for a deal with Labor on an emissions trading scheme.

Julia Gillard's carbon tax deal with the Greens and independents to form minority government in 2010 led the way to her demise.

Kevin Rudd's attempts to put new life into the issue at the 2013 election ended in tears, with Tony Abbott coming to power on a platform of "axe the tax".

Now a recycled Turnbull - who is still a staunch supporter of climate action - faces the heat from all angles.

His environment minister, Josh Frydenberg, set off alarm bells this week when he suggested the government, in undertaking a review, was looking at an "emissions intensity scheme" similar to that taken to the election by Labor.

Conservative senator Cory Bernardi said it was "one of the dumbest things" he had heard and Abbott chimed in saying: "The last thing ministers want to do is reopen questions that were settled for our side back in 2009."

Turnbull quickly went into defensive mode, despite such a scheme likely to be the centrepiece of the Finkel report and having been backed by CSIRO, the Climate Change Authority and the Australian Energy Market Commission.

"We will not be adopting an emissions intensity scheme. We won't adopt an ETS. We won't adopt a carbon tax, whatever way you like to call it," Turnbull said.

Treasurer Scott Morrison talked down the review as mere "housekeeping" and was surprised by all the fuss.

He has accused the Labor opposition of applauding the end of coal-fired power and setting an economically damaging renewable energy target of 50 per cent by 2030.

But such dismissals are dangerous and simplistic.

Leaving energy and climate policy in the hands of the states - with no national co-ordination or direction - might keep coalition climate sceptics at bay, but is not sound leadership by Turnbull.

The Climate Institute's John Connor says it is not a political game.

"We are talking about the stability of our energy system ... in a world that is turning to clean energy and is taking decarbonisation seriously," he says.

The energy industry and its investors are worried about a lack of national leadership.

Australian Energy Council chief Matthew Warren says the situation in SA shows the energy system is "visibly deteriorating".

Large power stations are being shut down without a plan to replace them and investment has been paralysed by a decade of policy uncertainty, he says.

"Australians want a reliable and affordable transition to a decarbonised energy future. It is not an unreasonable request," Mr Warren says.

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