The new energy minister has warned that Australia is on the brink of a gas crisis and that the problem will not be resolved quickly.
Key points:
- Gas prices are rising due to the war in Ukraine and problems with some coal-fired power plants
- The new Labor government is meeting with gas companies to find additional supply
- The Minister of Energy warns that the problem will not be resolved quickly
In his first day as Climate Change and Energy Minister, Chris Bowen has left all options on the table to reduce the rising cost of gas and electricity, including a controversial “gas trigger” to seize supplies. gas for export.
“Action needs to be taken and it is being done,” he promised gas users at his first press conference.
The operator of the Australian energy market has activated the gas supply guarantee, which will make the gas industry work with the regulator to ensure that the maximum gas demand can be met.
As a result, a $ 40 per gigajoule limit has been imposed in some states following a rise in wholesale prices.
Bowen noted that the decision to turn off the gas cat is up to the Minister of Resources, but doing so would not have an immediate impact anyway, minimizing suggestions that could be used to resolve the crisis.
The current cold season in south-eastern Australia and the collapse of a gas supplier last week have caused the spot price of gas to skyrocket.
Prices were already high due to rising international demand as nations around the world unleashed Russian gas and coal.
Problems with some coal stations in Australia have also contributed to pressure on gas prices nationwide.
“The Australian energy markets are facing a perfect storm,” Bowen said.
“There are a number of factors at play in relation to the very serious and challenging situation of electricity supply, and in particular gas supply.
“The old government promised a gas recovery and left us with a gas fire.”
The “gas trigger” would not go into effect until next year
The federal government has the power to force exporters to keep more gas on the ground for domestic use, under the Australian National Gas Safety Mechanism (ADGSM), known as the gas trigger.
Resources Minister Madeleine King is holding talks with gas companies today to encourage them to offer additional supply.
Bowen said he would not rule out or rule out the use of the gas trigger, but noted a myriad of problems with the mechanism.
“It cannot take effect until January 1, even if it is withdrawn today. It is not a short-term response,” he said.
He also noted that it requires a long consultation and can only be used when there is a shortage of supply planned for next year.
“Is not [a policy] designed to deal with the current crisis, “he said.
“More Renewable Energy” will ease the pressure, but not soon: Bowen
Workers were chosen with a broad policy to accelerate the shift to renewable energy, which Bowen said was the best solution to address pricing issues.
But he acknowledges that most of these policies would not help in the short term.
“The previous government did not do the necessary work to increase renewables, to increase storage,” he said.
“If we had more storage and more renewable energy and better transmission, we would be in a much better position to meet today’s challenges.”
Commonwealth energy ministers, states and territories will meet early next week to discuss other policy options to alleviate price hikes this winter.
The Australian Oil Production and Exploration Association, which represents gas exporters, has indicated that it will work with the regulator.
“We understand that current spot prices, which account for only 10% to 15% of the industrial gas market, are under pressure,” said Acting CEO Damian Dwyer.
“We note that most manufacturers are not affected because they have long-term contracts that, not long ago, were offered for this year at price levels between $ 6 / GJ and $ 9 / GJ.”
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Posted 50 minutes ago 50 minutes ago Thu, June 2, 2022 at 3:33 AM, updated 37 minutes ago, 37 minutes ago, Thu, June 2, 2022 at 3:47 AM