The Australian Energy Market Operator (AEMO) will have expanded powers to procure and store gas to be used in times of market spikes — one of several key outcomes from emergency talks held on Wednesday between Minister for Climate Change & Energy Chris Bowen, state and territory energy ministers, the AEMO and the Australian Energy Regulator to develop solutions to tackle the country’s energy price crisis.

As a result of the talks, a National Transition Plan will be created by all Australian governments in line with the AEMO’s Integrated System Plan, which lays out the necessary transmission and generation infrastructure required to meet future demand in the national electricity market.

The federal government has also 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.

“The Australian Labor Party was elected with a clear climate and energy mandate, including 82% renewables by 2030 and a A$20 billion (US14.36 billion) Rewiring the Nation roadmap fully evaluated by Reputex in December 2021,” ,” said Tim Buckley, director of Climate Energy Finance.

“Rather than more plans, co-ordinated actions are required urgently now; too many years have been lost already under the previous government.

No seat at the table

“[The] 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."

The Australian Petroleum Production & Exploration Association (APPEA) said the nation’s oil and gas industry recognises the issues confronting the east coast electricity market and noted that gas suppliers would continue to work constructively with regulators and governments on a way forward, following the meeting of energy ministers.

However, it called for the government to provide an attractive investment climate so that companies would continue to spend.

“Years of needless state moratoriums, bans and delays, have only contributed to the situation the east coast energy market is now in,” said APPEA acting chief executive Damian Dwyer.

“The industry has invested over A$20 billion on supply in the past 18 months. More can be invested under the right investment settings.

“But to do that needs more investment certainty. Natural gas gives the energy system stability. But the industry needs an investment environment that supports stability.”

APPEA added it is important the entire energy system is considered given recent pressures on gas supply were caused by coal-powered generation outages and the inability of renewables to input power as required.

“These are highly complicated regulatory matters, and we look forward to continuing consultation with regulators and governments to resolve them," said Dwyer.

“The [ministers’] meeting recognised the critical role the gas sector plays in meeting the energy security needs of the nation. We are doing everything we can to look after customers and fill the energy void left by coal-fired power generators in particular.

“Gas is delivering energy security to Australia and the current situation highlights the critical role gas will play in decades to come, replacing higher emissions coal and as a stabliser for renewables when the wind doesn’t blow and the sun doesn’t shine.”

However, Buckley claimed that giving the AEMO greater power 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,” he said.

“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 A$100 million per firm per year and introduce a Carbon Export Super Tax on these multinationals.

“The fossil fuel industry’s free ride on the back of Australian consumers and Australian industry must stop,” he added.