Energy ministers in Australia have unanimously agreed to strengthen energy regulators’ powers and give the market operator the ability to acquire and store gas supply.
On Wednesday, Energy Minister Chris Bowen convened a roundtable with his counterparts from the states and territories, at which 11 action points were unanimously agreed upon.
Mr Bowen claims that the measures will provide Australia with the tools and capacity it needs to deal with the gas situation in the future.
‘No silver bullet, no magic answers,’ he told reporters after the meeting. ‘But meaningful movements ahead in a very constructive manner.’
‘The Australian Energy Market Operator was unable to secure some gas and store it in reserve for use in emergency and crisis situations.
‘Technically, that is feasible. Storage facilities can be found all across the country. We committed to work together to deliver AEMO that power, and to do so quickly.’
Regulators will be granted more authority to ensure market openness and that merchants act in the best interests of customers.
The Australian Energy Market Commission has been directed to continue working on the capacity mechanism, which ensures that power plants are ready to provide electricity when it is needed.
Prior to the next meeting in July, the establishment of a national energy market transition plan was also agreed upon.
Mr Bowen stated, “The reason we are in this predicament today is because there hasn’t been enough forethought about the adjustments that are required.”
‘This is the result of poor planning and a previous government that failed to understand the prospects for transmission and renewable energy.’
Unexpected outages of coal-fired power facilities, according to Resources Minister Madeline King, are adding to stresses on the energy grid as gas providers try to expand output.
‘Existing coal fired power stations going offline due to planned and unplanned outages combines to see this extraordinary price,’ she told Sky News.
NSW Treasurer and Energy Minister Matt Kean said the state’s coal-fired power stations needed to increase their output following the unexpected outages, to act as a stopgap with surging gas prices due to the war in Europe.
‘When we’ve got coal-fired power plants that are not in operation due to unscheduled outages, that means gas is filling the gap,’ he said.
‘We need to get our coal-fired power stations back cranking up. We need our power stations running at full tilt during the winter period, so we’re less reliant on gas and can put downward pressure on electricity prices.’
The domestic gas supply guarantee coming into play is also helping to provide some relief to the east coast, but prices will not drop substantially overnight, Ms King added.
‘The gas … is going to where it needs to be and that should flow through the system,’ she said.
‘I’m not saying we’re going to see a massive reduction in prices overnight. We’re certainly not because we still need those … existing coal fired power stations to come online. But the gas is moving around, more gas has been supplied.’
The ACT is set to become the only Australian jurisdiction to experience a small decrease in electricity prices off the back of large-scale renewable energy projects coming online, its economic regulator says.
Prime Minister Anthony Albanese said coal would remain a part of the energy mix, while Mr Bowen earlier warned there was no easy fix to the energy crisis as the nation was ill-prepared to manage it.
Treasurer Jim Chalmers is awaiting advice from the competition watchdog on the role and impact of coal-fired power plant shutdowns on energy prices and what regulations could be used.