No “magic answers” to the energy crisis

The man responsible for Australia’s overstretched energy system spoke to the media after holding an emergency meeting.

Energy Minister Chris Bowen said regulators would be given greater power to source and store gas after crisis talks with state and territory energy ministers.

Mr Bowen said Australian energy ministers agreed on Wednesday night to take 11 steps, but acknowledged there was no “silver bullet” or “magic answer”.

“We have also agreed that we will work to strengthen the powers of regulators to ensure that they have full transparency, particularly in the gas market, of what is happening and to ensure that any behavior is in the best interest of the market and consumers at all times,” he told reporters after the meeting.

Ministers also agreed to give Australia’s energy market operator the power to purchase and properly store gas as a supply.

“Australians might be surprised to learn that such power did not exist – that the Australian energy market operator could not procure gas and hold it in reserve and be released for emergencies and crisis,” Mr. Bowen said.

“It is technically possible, there are storage facilities all over the country. We have agreed to work to give this power to the AEMO and to give it to them quickly.

“It will give us the capacity and the tools to manage this crisis in the future and to avoid crises like this in the future.”

Mr Bowen said it had also been agreed to ask energy regulators to proceed with the development of the capacity mechanism as a matter of urgency.

The regulators, who informed the meeting, pledged to draft a new draft on this in the coming days.

“We are very keen to see this implemented urgently,” Mr Bowen added.

Capacity mechanisms are common in other parts of the world and explicitly value capacity in the national electricity market.

Ministers also agreed to work on and advance a national renewable energy transition plan ahead of their next meeting in July.

“The reason we are in this crisis today is that there has not been enough planning for the necessary changes,” Mr Bowen said.

“We need an integrated plan that addresses the full range of transformation that is underway and needs to happen faster.”

The emergency meeting was called to discuss the rising cost of electricity, as wholesale electricity and gas prices soar to “unprecedented” levels.

“President Putin’s electricity price spikes” are responsible for what is expected to be a “very expensive winter” caused by Russia’s war in Ukraine and a host of domestic issues.

The conflict has led to a global gas shortage, prompting Australia to rely on its aging coal-fired power stations, at least 25% of which are offline due to scheduled or unplanned outages.

Mr Bowen said earlier there was ‘no easy solution’ to all the problems caused by the previous government’s nine years of lackluster energy policy.

“What really caused this problem is that we haven’t had the investment we need in renewable energy, transmission and storage,” he told ABC Radio.

“Over the past few years, we’ve seen a 17% reduction in renewable energy investment… We need nine times the utility-scale renewable energy to make the system more stable.

Mr Bowen said Wednesday’s crisis meeting, convened by a broad coalition of leading bodies, was a chance for all states and territories to start working “hand in hand” with the Commonwealth to better plan the transition to renewable energy.

“We are a team… We have to get this transition right,” he said.

Nationals leader David Littleproud has suggested one way forward is to switch to nuclear power – despite it being in decline around the world.

“It’s an emerging technology … I don’t think we should be afraid to have this conversation,” Mr. Littleproud told ABC News.

But Mr Littleproud’s call is backed by Australian Workers Union national secretary Dan Walton.

Speaking to Sky News Australia’s Economic Outlook Forum, Mr Walton said he was a ‘big fan’ of nuclear power, but the ship had sailed.

“It’s harder to see a solution where nuclear plays a more active role in this country. I wish that had happened already,” he said.

“But I think the development of hydrogen and others and battery storage will likely outstrip demand.”

Treasurer Jim Chalmers agreed: “The saving doesn’t accumulate.

“I don’t think they ever stacked up in Australia,” he said.

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