Liberal backflip on energy policy

Less consequential than it sounds: Yesterday's Liberal Party announcement is unlikely to deliver a substantially different outcome from the pathway the energy system is already on. Even if the Coalition abandons net-zero entirely and reorients policy to the single objective of cheap, reliable electricity, the physics and economics of the grid do not change. The policy shift slows the transition, but it does not fundamentally redirect it.

What doesn't change (primarily because physics + ageing + cost curves):

• Old coal still retires - age, failures and rising maintenance make closures inevitable, though newer units may run longer than currently scheduled.

• New coal remains unlikely - even flexible ultra-supercritical coal plants cannot beat the cost of renewables + storage + peak-only gas in Australian conditions.

• Nuclear is still uneconomic and too slow - 15-20 year lead times and high capital cost make it a poor match for Australia's grid structure and investment timelines.

• Existing rooftop solar cannot be curtailed - disabling the feed-in from 4+ million homes, to improve the economics of new baseload power generation (coal or nuclear), is not politically viable and would raise household electricity costs - creating a permanent constraint.

• Rooftop solar and household batteries keep expanding - driven by retail bills, economics and consumer preference, not climate policy.

• Large-scale storage and firming remain essential - because variability, system strength needs and declining synchronous inertia are technical realities, not outcomes of emissions policy.

What does change (tempo, sequencing, political packaging):

• Coal stays online longer through subsidies, life-extensions or capacity mechanisms.

• Gas plays a larger bridging role - depending on fuel availability, reservation policies and social licence for new gas infrastructure.

• Large-scale renewables build slows - partly because economics are already deteriorating (particularly for solar: midday price compression, curtailment risk, storage interdependency) and partly because removing targets eliminates the policy push that was offsetting these headwinds. Policy volatility compounds both effects.

• Transmission build slows at the margins - but critical links needed for stability, congestion relief and system security will eventually proceed because they are technical requirements, not climate-driven luxuries.

The overall picture: Abandoning net-zero delays the decarbonisation pathway, but it doesn't create a new one. The combination of ageing coal, ultra-cheap wind and solar resources, falling battery costs, entrenched rooftop PV, and the need for fast-response services means the system still drifts toward a renewables-plus-storage backbone over time (even if price and reliability is the only policy driver).

The main risks are:

• Gas constraints, which could force earlier storage deployment; and

• Investment paralysis, where uncertainty causes both renewables and refurbished coal to stall, creating reliability gaps.

Either way, delays don't make the grid different - they make it weaker: older coal, higher maintenance costs, slower build-out, a thinned-out workforce and delivery chain, and rising reliability stress.

So why do it: the announcement is more a political strategy than a strategic energy policy position. Australia has pursued net-zero in a somewhat chaotic and improvised way, and the grid does have real fragilities - in firm capacity, inertia, and system strength. If reliability wobbles or prices rise further (both moderately likely), the Coalition is well placed to frame this as Labor's mismanagement.

Like many things in life, the destination is physics and economics, but the journey is politics.