Industry responds to Energy White Paper

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The Australian Government has released its Energy White Paper, detailing its approach to energy policy framework, which has been met by a largely positive response from energy industry groups.

The Energy White Paper outlines three main outcomes it seeks to achieve:

  • Increasing competition between generators and retailers
  • Increasing energy productivity and efficiency
  • Increasing infrastructure investment for the energy sector, including for global export projects.

Some of the initiatives that the government will undertake to achieve these aims include encouraging the privatisation of state and territory electricity assets; and introducing cost-reflective electricity tariffs, under which consumers are increasingly charged according to what it actually costs to supply energy at the time it is used.

A national energy productivity improvement target will also be determined as part of the development of a National Energy Productivity Plan. The White Paper outlines a potential national target of up to 40 per cent improvement by 2030.

And the government will commission an Australian Competition and Consumer Commission inquiry will look at the effectiveness of competition in the gas market, in response to ongoing concerns about market transparency.

The White Paper also shoots down the concept of domestic gas reservation policies, stating “The Australian Government does not support reserving gas for domestic use. Reservation would result in less profitable production, attracting less investment, thereby reducing supply and raising costs.

Current gas exploration moratoriums in New South Wales and Victoria were also addressed, with the White Paper noting that in the current market “unnecessary state regulatory barriers are limiting much-needed new gas supply”.

The White Paper has been largely welcomed by energy industry groups, including the Energy Networks Association (ENA), the Australian Petroleum Production and Exploration Association (APPEA), the Australian Pipeline and Gas Association (APGA) and the Energy Retailers Association of Australia (ERAA).

ENA CEO John Bradley said the White Paper provides a sensible policy framework to enable consumers to take control of their energy use with new information, fairer pricing and emerging technologies.

“The Energy White Paper has rightly focused on the need to modernise Australia’s outdated electricity tariff structures, to reward customers who use off-peak energy and avoid unnecessary investments,” Mr Bradley said.

“We welcome the Government’s commitment for the COAG Energy Council to deliver a concrete implementation plan for electricity tariff reform by the end of this year.

He also said the ENA supports the focus in the Energy White Paper on ‘technology neutral’ policy settings, recognition of the need for investment certainty, and the avoidance of unnecessary Government intervention in energy markets which increases costs to consumers.

APPEA Acting Chief Executive Paul Fennelly welcomed the White Paper’s focus on establishing Australia’s energy industry as an attractive place for international investors.

“Policies that enhance Australia’s attractiveness as a place to do business and encourage industry to increase domestic gas supplies can deliver another wave of prosperity for Australia.”

APPEA believes that the paper’s advocacy for establishing effective regulation that allows for the sensible, responsible and timely approval of resource projects is a step forward.

Australian Pipelines and Gas Association (APGA) Chief Executive Cheryl Cartwright noted that while the association is “enthusiastic” about the positive impact on the economy of increasing gas exports, it doesn’t want the local gas market to be overlooked as a result.

APGA also reacted positively to the White Paper’s recognition that a market-based response, rather than a gas reservation policy, is the best way to meet gas demand.

“If there’s a shortage in a market, or if the price is high, the market should respond; current higher prices and intensive demand should encourage an increase in supply, so we welcome a review of competition in the wholesale gas market,” Ms Cartwright said.

ERAA General Manager Regulatory and Public Affairs Alex Fraser welcomed the White Paper’s proposal to streamline the energy market and to drive competition and innovation. “The ERAA supports changes outlined in the White Paper to promote competition and empower consumers. In particular, where this is supported by a reduction in regulatory barriers and the introduction of new technologies,” she said.

The main criticism of the White Paper has come from groups who note that the report offers little discussion on the role renewable and storage technologies can play in Australia’s future energy mix. Energy Supply Association of Australia Chief Executive Matthew Warren described the report as “incomplete until it directly considers and addresses climate change policy, along with its impact on the economy and the energy sector”.

 

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