A senior Australian union leader has used a National Press Club address to call for the creation of a government-owned renewable energy company to power the country's industry. Michael Wright, Secretary of the Electrical Trades Union, set out the proposal in a speech titled Powering Australia's Future, delivered alongside Alison Pennington, chief economist at the Mackell Institute.
Wright framed energy as the foundation of the entire economy rather than just one sector among many. He described it as the platform on which every industry, process and household depends, from fertiliser to iron ore to data. Energy abundance, he argued, equals economic resilience and well-being, while energy scarcity amounts to economic and social sabotage for the country.
At the centre of his case was the state of Australia's ageing power stations. Wright said the country's coal and gas plants have served the nation well but are now old and breaking, held together by little more than the hard work of union members. They no longer produce low-cost, reliable energy, he said, and soon will not produce energy at all, making urgent replacement unavoidable.
He was sharply critical of the current approach, dismissing Angus Taylor's plan to run the existing fleet into the ground as a failed plan from the failing leader of a failed party. Wright argued the debate often misses that demand for electricity has exploded, with the country effectively building not to 82 or even 100 percent renewables, but toward something like 700 percent of the current grid as other fuels are replaced by electricity.
Wright argued the private market alone cannot meet that challenge, calling the belief that it can the biggest risk to Australian industry. He said foreign investors own a rising share of generation in the national electricity market, and that the governments of China, Saudi Arabia, Qatar, Thailand, Malaysia and Singapore now own more of the country's renewable generation than the federal government does. Private contracts, he added, are too small, too short term and too highly priced.
He spelled out the consequences for industry. Wright said Australian manufacturers are paying three times more for energy than their US competitors, a point he said led BlueScope chief executive Mark Vassella to warn months earlier that foreign energy companies were undermining Australian industry. As supply contracts with legacy generators expire, he said, industry is finding there is no replacement on offer, and taxpayers have already bailed out five key industrial sites in the past three years.
His answer is a new Commonwealth entity he called Sovereign Power, established under standalone legislation and funded by a direct Commonwealth equity injection. He said it would build and own generation projects and sell electricity at long-term, low prices, with a single job of powering Australian industry at cost. It would not be a retailer, a wholesaler or a profit-seeking government business, he said, but a body designed purely to close the gap the market has left.
Wright argued the model works because public financing is cheaper. He said private developers face a weighted average cost of capital of about 7 percent in real terms, while the Commonwealth's cost of capital is nearly a third lower. On a given 23 billion dollar investment, he said, that gap amounts to around 19 billion dollars more in capital costs alone over the life of a project, money that would not have to be spent. According to the modelling released with the plan, the body could supply industry at around 65 dollars per megawatt hour, against roughly 117 dollars in the current market, with the saving locked in through 15 to 25 year supply contracts.
He framed the plan as a way to secure what he called sovereign capability, arguing that Australia already controls two critical inputs, resources and labour, but not the third, electricity. The plan would let the country refine more of what it digs up and create value at home, while helping address a shortage of 42,500 electricians by 2030. He rejected the idea that the concept is untested, saying public energy had grown Australian industry before, citing the aluminium operations at Tomago. The speech was billed as the Westpac Address at the National Press Club.