Prime Minister Malcolm Turnbull came out of an energy crisis meeting today saying gas companies had given a guarantee on future supply.
“So there won’t be a repeat of a situation where a gas-peaking power plant is called on by the regulator to produce electricity during a heatwave, and there’s no gas available,” he told the media in Canberra.
The producers agreed to have enough supply to meet peak demand by next summer to deal with any heat waves.
They also said they would make more gas available to the domestic market as soon as possible, to keep downward pressure on prices.
Turnbull called the meeting with gas suppliers following a warning by the energy market regulator of the possibility of blackouts as early as next year.
He has also called on the states to encourage on onshore gas exploration to help ensure future supplies.
Before today’s meeting, Turnbull said: “It is not acceptable for Australia – shortly to become the world’s largest exporter of liquefied natural gas – to not have enough gas for its own families and its own businesses.”
The prime minister later released a statement, outlining agreed measures to help deliver cheaper and more reliable energy and increase gas supplies for businesses.
Peak Electricity Demand – Gas Supply Guarantee
- Gas producers guarantee that gas will be available to meet peak demand periods in the National Electricity Market (such as during heat waves).
- Implementation arrangements will be developed with the market bodies and other industry participants. The Australian Energy Market Operator will be given a power to direct the market.
This arrangement will be in place in time for next summer.
2. New gas production
- The gas producers have agreed to make more gas available to the domestic market as soon as possible, to keep downward pressure on prices.
- Producers will revise their domestic gas production forecasts, and AEMO will produce an updated supply outlook.
- Two of the LNG exporters gave a commitment to being net domestic gas contributors, as part of their social licence. The third has taken the matter on notice.
3. Market transparency
- The Australian Competition and Consumer Commission and Dr Mike Vertigan will advise on options to quickly improve transparency in the gas market, to facilitate competition between producers and information for purchasers.
- The scope will include the full supply chain – producers, transporters, retailers.
4. State regulation
The meeting called on the state and territory governments to revisit restrictions on gas exploration and development.
5. Community support
Industry acknowledged the importance of community support.
6. Gas market reform
- Gas market reforms arising from the recent ACCC gas review will be accelerated. These reforms will improve pipeline capacity trading and gas trading markets.
- Further reforms to improve the gas market will be urgently considered.
7. Implementation arrangements
- The Government is establishing a Taskforce that will manage implementation of the above outcomes, and report to the Cabinet Energy Committee.
- The Taskforce will include key Departments (PM&C, Energy, Industry, Treasury) and agencies (Geoscience Australia) and energy market bodies (AEMO, ACCC/Australian Energy Regulator, Australian Energy Market Commission).
- The parties agreed to meet again in a month to review progress.
- Ministers Frydenberg, Sinodinos and Canavan will meet with gas pipeliners and customers over the next few weeks
“The Government welcomes the commitment of the industry to accelerate the availability of gas resources,” the statement said.
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