Federal Energy Minister Chris Bowen is set to hold an emergency meeting with his state and territory counterparts today to address soaring energy prices and supply shortages and a coalition of Australian peak bodies has urged the ministers to craft a balanced and staged response to address the situation.
The coalition, whose 29 signatories include Clean Energy Council chief executive Kane Thornton, Rewiring Australia founder Saul Griffith and Australian Industry Group chief executive Innes Willox, said a staged approach, including accelerating the transition to renewables will be key to addressing the crisis, warning short-term responses are unlikely to be sustainable for the long term.
“A staged response is essential because this crisis includes both acute price pain and the likelihood of chronic high prices thereafter,” the group said in a statement. “Only a handful of measures are likely to help in the short term and they are unlikely to be sustainable.
“A balanced response will address both the supply and the demand sides of this crisis.”
Residents in Australia’s eastern states are facing massive energy price hikes. The prices of coal and gas have surged in recent months and wholesale electricity prices have skyrocketed. The Australian Electricity Market Operator (AEMO) has reported that in the first quarter of 2022 wholesale prices went up 141% from last year.
The price spikes have been linked to challenging global environment triggered by the Russian invasion of Ukraine while extreme weather events in New South Wales and South-East Queensland have also contributed, as have unplanned outages at several of Australia’s ageing coal plants.
Australian Industry Group chief Willox said “all of Australia’s former energy strengths – our reliance on the legacy coal generation fleet, large gas resources and a deep entanglement with export energy markets – are working against us in the current circumstances”.
Willox called on the new federal government to act urgently on the current electricity price crisis, including having the Commonwealth re-engage with state governments on the energy transition.
“Apocalyptic rises in energy prices threaten chaos for industry and pain for households,” he said. “They demand a national, integrated and strategic response.”
Bowen, who will today meet with the state and territory energy ministers to discuss solutions as the federal government weighs up measures to take pressure off prices and ease the current supply situation, said that energy markets are facing a “geopolitical situation around the world”.
“We are facing some coal-fired power closure station outages and some flooding impacts on coal mines and an array of other factors,” he said. “The situation is serious, but it is being managed. The Albanese Labor government will take whatever action is necessary to ensure ongoing reliability and affordability for the energy markets … based on expert advice.”
The group of peak bodies, including business representatives, consumer advocates, farmers, investors, the property sector, and Australia’s energy and energy management sectors, said the ministers need to focus on neglected parts of the energy transition, including supporting improvements in energy efficiency and demand-side energy management, alongside ongoing support to increase the supply of low-cost and-low emissions energy.
“A long-standing lack of investment in energy efficiency, energy management and fuel switching has left Australians more vulnerable both to high prices and to extreme weather,” it said.
“Demand-side investments don’t just pay off through lower individual bills. They deliver improved health and higher energy productivity, reduce the need for new supply-side investment, and help us reach our emissions goals.”
“Accelerating our clean energy transition in a fair and inclusive way will ultimately deliver durable help, but while that requires immediate action it will largely impact the medium term.”
The group said a faster buildout of large-scale renewables and transmission “makes all the sense in the world”, as does accelerating the transition from natural gas to green hydrogen but warned making it work would require a collaborative approach.
“Actually making this acceleration work will be complex, requiring reforms and coordination across multiple jurisdictions and both public and private investments,” it said.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.