As Australia continues to be gripped by its energy price crisis that has seen power costs skyrocket for consumers and industry, new Minister for Climate Change and Energy Chris Bowen has met with state and territory energy ministers, the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator (AER) to develop solutions, writes Gavin Dennett.
On Wednesday, 8 June, 2022, Minister Bowen engaged in the landmark video-link meeting at a time when a gas shortage in several Australian states prompted AEMO to cap prices as a winter cold snap sent wholesale electricity costs soaring in the National Electricity Market.
A priority item on the meeting’s agenda was securing an agreement for the Australian Energy Market Operator to be begin work to buy and store gas “for situations exactly like the ones we faced last week”, according to Minister Bowen.
“Australians might be surprised to learn that power did not exist, that [AEMO] could not procure some gas and keep it in reserve to be released for urgent and crisis situations,” he added.
Richie Merzian, climate and energy program director at The Australia Institute, says the recent gas crisis is another urgent reminder the nation needs to shift away from gas dependence.
“Australia doesn’t have a gas supply problem, it has a gas export problem,” he says. “As long as Australia remains dependent on gas and coal, Australian consumers will be over the barrel of global fuel prices influenced by events beyond our control.
“Allowing global coal and gas companies to export vast quantities of our resources may have seemed like a good idea at the time, but it has locked us into exposure to volatile global prices, making Australians vulnerable to price shocks from global circumstances.
“As a matter of urgency, the newly sworn in Minister for Climate and Energy should examine options to curtail gas exports to safeguard a sufficient affordable gas supply for Australians in the short-term.
“In the medium-term, this government should look to do everything possible to speed up electrification, helping households get off expensive gas. This would not only save households from skyrocketing energy bills, but free up gas resources for industries that will take longer to transition.”
Another key outcome from the meeting was an agreement by attending ministers to work on a National Transition Plan – in line with AEMO’s Integrated System Plan – relating to how the Australian economy will transition away from fossil fuels and meet future demand in the National Electricity Market.
“It’s about time,” says Greg Bourne from the Climate Council. “Finally, a coordinated and clear plan can be developed that will meet the needs of all Australians rather than leaving the state and territory governments to do all the work, as we saw with the previous Federal Government.
“Thankfully, the new Federal Government is stepping up and seizing the huge clean industry opportunities before us, and at the same time protecting Australians from future price shocks driven by volatile, expensive and unreliable fossil fuels.
“After Australia’s lost decade on climate action, it finally feels like we are catching up with much of the rest of the world and embracing the future, rather than clinging to the past.”
Also stemming from the meeting is a commitment to the strengthening of regulator powers to ensure full transparency in energy markets so all actions are in the best interests of the market and consumers.
“Australia must plan and implement steps to free itself from expensive, polluting and unreliable fossil fuels – and fast,” says Andrew Stock from the Climate Council.
“The current energy crisis demonstrates starkly just how costly the absence of serious energy policies by the former Morrison government has been. Now electricity consumers are forced to pick up the tab.
“The former Federal Government denying climate change and failing to deeply cut electricity emissions is costing Australian consumers dearly. Most of the nation has wasted a decade in the energy transition to renewables.
“The new Federal Government has to step up alongside the states and territory governments to get on with showing what strong climate and energy leadership looks like.”