(Opinions expressed here are those of the author, columnist for Reuters.)

LAUNCESTON, Australia (Reuters) – Australia is turning into an example of what happens when markets leave policymakers, with renewables attracting investment dollars even as a conservative government clings to its vision of a natural gas future.

Two recent announcements underlined that Australia is moving towards an energy future where renewable energy plays the biggest role, and Prime Minister Scott Morrison’s proposed gas-based recovery may turn into a white elephant.

Fortescue Metal Group FMG.AXThe world’s fourth-largest iron ore miner built from scratch by billionaire Andrew Forrest outlined his plans on Wednesday to become a global renewable energy giant.

Forrest said his company has so far committed A $ 1 billion ($ 731 million) to build a portfolio of renewable energy assets, including green hydrogen and ammonia, and has a target of having an installed energy capacity of 225 gigawatts (GW).

“With scale and innovation, we will be able to increase the supply of green hydrogen and green ammonia to deliver low-cost energy reliably on an industrial scale to customers around the world,” he said at the Fortescue annual meeting.

A second example is the attempt by the state government in Victoria, Australia’s second most populous state and home to Melbourne, to build a 300 megawatt battery as part of an effort to build electricity capacity.

“With climate change resulting in hotter summers, peak electricity demand is increasing. At the same time, the aging coal fired generators in Victoria are becoming increasingly unreliable, resulting in the need for additional capacity to ensure the state’s electricity supply, “the state government said in a statement on its website.

“This additional capacity will lower electricity prices for all Victorians and provide significant net benefits for Victoria, far exceeding project costs,” the government said.

There are two key messages to unlock in that statement.

The first is that coal-fired power plants, which have long been a mainstay of the Victorian, and even Australian electrical systems, are now considered old and unreliable.

Second, installing the battery, which will be the largest in Australia, will result in lower and profitable electricity prices.

FIZZLE GAS

This cuts the argument from Morrison, who heads the federal-Liberal-National coalition government, and proponents of the gas-fired recovery that renewable energy cannot provide adequate reliability and will be costly.

The federal government’s gas-fired recovery plan rests on subsidizing the transport of natural gas from remote areas where it is found to major urban centers on Australia’s east coast.

This may also involve the government building its own gas-fired power plant near Sydney’s largest city, given that no private sector generator currently has plans to build such a plant, mainly citing the absence of a lucrative business case.

What Morrison hasn’t elaborated on is the extent to which subsidies are needed to make natural gas “cheap” enough to compete with renewables in the Australian power market.

Given that most natural gas is located in remote basins thousands of kilometers (miles) from major cities on the east coast, it is likely that these subsidies will need to be large, and long-lasting, for the fuel to be competitive.

There’s an old saying that anything can be made to work if there is enough taxpayer subsidies to do it, and it seems like this is the path Morrison is looking to follow.

It is likely to be expensive for taxpayers and worse than if the same money was invested in increasing use of renewable energy, powered by battery storage or pumped hydro, or even powered by gas-fired peak power plants.

But the most damning reaction to Morrison’s gas-based recovery plan has been how markets ignore it and move on.