Warnings Australia at risk of gas and electricity shortages

SBS World News Radio: The national energy market operator claims Australia is at risk of experiencing widespread gas and electricity shortages in the next two years.

Warnings Australia at risk of gas and electricity shortagesWarnings Australia at risk of gas and electricity shortages

Warnings Australia at risk of gas and electricity shortages

Federal Energy Minister Josh Frydenberg is pressuring some state governments to overturn bans on fracking to increase the supply of gas.

Labor, meanwhile, is blaming the Coalition's lack of a clear climate policy for what it calls an emerging energy crisis.

Australia is running out of gas.

That's the conclusion of a new report by the Australian Energy Market Operator.

It says New South Wales and South Australia will be the first affected by shortages in 20-19, followed by Victoria in 20-21.

Energy Minister Josh Frydenberg says state-by-state restrictions on hydraulic fracturing, or fracking, are hurting the national supply.

"What we need is more gas supply and more gas suppliers and that's why we - as a federal government - are imploring the state governments to lift their moratoriums and get more gas out of the ground."

This week Victoria decided to ban fracking altogether - and a moratorium on conventional gas extraction remains in place.

The Northern Territory also has a moratorium on fracking - but the Territory isn't hooked up to the national energy market.

Prime Minister Malcolm Turnbull echoed the minister's calls to overturn restrictions on gas exploration.

He says he'll be holding urgent talks with gas companies.

"That's why I'll be urgently calling the chief executives of the east coast gas companies together, to explain how they plan on addressing this threat to their customers."

The market operator, AEMO, did suggest looser restrictions on fracking might help alleviate the shortage.

But the report suggested other solutions, too.

The majority of Australia's gas is exported - and shifting some of that to the domestic market could shore up supply.

Labor's energy spokesman Mark Butler says Labor would adopt a national-interest test on new gas developments to ensure local needs are met.

"This Government has been utterly asleep at the wheel while we have been warning since our 2015 national conference there is a gas crisis emerging in this country. That is why we adopted our policy at the national conference and Bill Shorten has been arguing ever since for a robust national interest test around gas developments."

The head of AEMO says the report is no cause for alarm.

Mike Cleary told the ABC, the shortages will only occur if current trends continue.

"But I do want to stress, this assumes that nothing will happen. The role of AEMO is to get this information into the market place to allow the market to respond and there are things the market can do. For example the five percent change, or you know movement of gas from the export market to the domestic market would eliviate this issue. Or if we had new gas fields coming online on an increase from the current gas fields that would also help with this situation."

As the political debate over energy continues, the peak body representing the country's biggest energy providers says changing and conflicting government energy policies are driving prices up.

Matthew Warren is from the Australian Energy Council.

"Inaction, policy inaction, is increasing power bills and it is increasing the risk of blackouts next summer. And these are serious and material risks to Australian consumers both at the household and business level."

Experts say that's because would-be investors are steering clear of the energy sector, unsure of the government's policy intentions.

Ken Baldwin is a scientist specialising in energy at the Australian National University.

"Businesses are avoiding investment in the energy sector simply because of government policy uncertainty. They need to have an assurance that over the 50 year life time of the plant they're investing in, that there will be a viable return based on known parameters."

 

 


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Presented by James Elton-Pym

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Warnings Australia at risk of gas and electricity shortages | SBS News