Ministers to allow AEMO to procure and store gas

Energy ministers at desks with laptops for energy crisis talks (AEMO)
Image: AAP

Yesterdays crisis talks between energy ministers, AEMO and the AER has resulted in a decision that will see a National Transition Plan created by all Australian Governments in line with AEMO’s Integrated System Plan (ISP), which lays out the necessary transmission and generation infrastructure necessary to meet future demand in the National Electricity Market.

The Federal Government has tasked the Energy Security Board with developing a draft Capacity Mechanism, which will ensure there is adequate dispatchable capacity in the system to ensure demand is always met. The mechanism will be expert led and focused on renewable energy and storage, remain within the bounds of Net Zero by 2050, and include open consultation.

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Energy ministers say AEMO will have expanded powers to procure and store gas to be used in times of market spikes.

Not everyone is happy with the decision. Energy market analyst Tim Buckley said, “AEMO has done a great job on their Integrated System Plan to provide a roadmap, but their mandate for reliability and affordability needs to be updated to have an explicit decarbonisation objective as well. We need to solve both the emerging domestic energy crisis and the worsening climate crisis.

“A capacity mechanism is not going to solve the current energy crisis. Nor will consulting with CEOs of the fossil fuel firms and their lobbyists that caused this domestic eastern Australian crisis. Multinationals who pay no corporate tax in Australia should not have a seat at the table.

“Giving AEMO more powers to procure really expensive gas is ineffective. Australia is the largest exporter of fossil gas in the world. We need to implement the Australian Domestic Gas Security Mechanism to reserve domestic east Australian gas to meet domestic needs at a reasonable price, and let the multinational gas cartel export the surplus. There is no sovereign risk in putting the interests of 22 million Australians and domestic industry ahead of the multinational gas cartel.

“Australia has inherited a trillion dollars of debt from the previous government’s mismanagement. It is time to repeal all fossil fuel subsidies, cap the diesel fuel rebate at $100m per firm per year and introduce a Carbon Export SuperTax on these multinationals. The fossil fuel industry’s free ride on the back of Australian consumers and Australian industry must stop.”

Greg Bourne, former President of BP Australasia, disagreed.

“It’s about time. Finally, a coordinated and clear plan can be developed that will meet the needs of all Australians, rather than leaving the state and territory governments to do all the work, as we saw with the previous federal government,” he said.

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“The reality is that right now the gas companies are reaping massive profits off our products, while consumers only reap the misery. That just isn’t right. Thankfully, the new federal government is stepping up and seizing the huge clean industry opportunities before us, and at the same time protecting Australians from future price shocks driven by volatile, expensive and unreliable fossil fuels.” 

“After Australia’s lost decade on climate action, it finally feels like we are catching up with much of the rest of the world and embracing the future, rather than clinging to the past.”