The new energy minister has warned that Australia is on the brink of a gas crisis and the problem will not be resolved quickly.
- 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 more supplies
- The Minister of Energy warns that the problem will not be resolved quickly
On his first day as Secretary of Climate and Energy, Chris Bowen left all options on the table to curb rising gas and electricity costs, including a controversial “gas starter” for requisitioning gas supplies for export.
“Action is needed and action is being taken,” he promised gas users at his first press conference.
The Australian energy market operator has activated the Gas Supply Guarantee, which will allow the gas industry to work with the regulator to meet peak gas demand.
This is followed by the introduction of a $ 40 per gigajoule cap in some countries following soaring wholesale prices.
Mr Bowen noted that the decision to squeeze the gas rests with the Minister for Resources, but if that were the case, it would not have an immediate impact and downplayed proposals that could be used to resolve the crisis.
The current winter in South East Australia and the collapse of the gas supplier last week have caused the spot price of gas to rise sharply.
Prices were already high due to growing international demand as nations around the world shut down Russian gas and coal.
Problems with some coal stations in Australia have also contributed to the pressure on domestic gas prices.
“Australian energy markets are facing a perfect storm,” Mr Bowen said.
“In connection with the very serious and demanding situation in the supply of electricity, and especially gas, a number of factors play a role.
The “gas starter” will not come into force until next year
The federal government has the power to force exporters to hold more onshore gas for domestic use, under the Australian Home Gas Safety Mechanism (ADGSM), known as the gas trigger.
Resource Minister Madeleine King met with gas companies on Thursday to encourage them to make more supplies available.
Mr Bowen said he would not decide or rule out the use of the gas trigger, but pointed to a myriad of problems with the mechanism.
“It cannot enter into force until January 1, even if it is withdrawn today. It is not a short-term answer,” he said.
He also noted that this requires lengthy consultations and can only be used where there is a shortage of supply for the coming year.
“She is not [a policy] designed to deal with the current crisis, “he said.
“More renewables” will ease the pressure, but not soon: Bowen
Labor has been elected with a comprehensive policy to speed up the transition to renewable energy, which Mr Bowen said is the best solution to tackling price problems.
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 renewables and better transfer, we would be much better prepared to address the current challenges.”
Commonwealth, state and territorial energy ministers will meet early next week to discuss further policy options to ease price increases 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 represent only 10 to 15 percent of the industrial gas market, are under pressure,” said incumbent CEO Damian Dwyer.
“We emphasize that most manufacturers are unaffected because they have long-term contracts that were only recently offered for this year at price levels around 6 USD / GJ to 9 USD / GJ.”
Posted , updated
#Perfect #storm #Minister #Energy #issuing #threatening #warning #gas #prices #rise