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ENERGY SECURITY: A CRUCIAL ISSUE

02-05-2017
by 
in 

Energy security is a crucial issue for Australian industry. A safe, secure and affordable power supply is an essential requirement for our citizens, our economy and our heavy industrial sectors.

We have an abundance of coal, gas, sun and wind resources, yet our energy is among the most expensive in the OECD[1]. This impacts on our competitiveness and employment.

A reduction in our energy security puts at risk billions of dollars of investment in the livelihood of Australians and our ongoing quality of life. It’s critical that all sectors of industry have access to affordable, reliable and secure energy.

Manufacturing is no exception. Manufacturing is a major force in our economy, employing more than 950,000[2] Australians.

Australia must be able to provide the entire manufacturing sector with energy that is affordable, reliable and secure, while meeting our environmental obligations.

The Australian Government is committed to setting the right policy environment to provide that affordability, reliability and security. The Government’s focus is on ensuring the energy market operates as efficiently as it can in the long-term interests of consumers, including all sectors of Australian industry.

The Government is doing this in the face of numerous challenges.

Right now, a tight supply of gas is among the main obstacles to energy security. High prices have also had flow-on effects, through the increased cost of the gas used in gas-fired power generation, which is having an impact on wholesale energy prices.

The Government is working on measures to secure the nation’s domestic gas supply and put downward pressure on gas prices. The Prime Minister has the agreement of gas suppliers to make more gas available to domestic markets, as well as a guarantee gas will be available for power generation at times of peak demand.

The Government will look to accelerate the reform agenda already underway through the COAG Energy Council to improve supply and transparency in the gas market.

The Australian Competition and Consumer Commission (ACCC) and Dr Mike Vertigan will advise on further options to quickly improve gas market transparency - to put further downward pressure on prices, and the Government has directed the ACCC to review retail electricity prices.

There have also been significant changes to Australia’s energy generation fleet, with growth in renewable generation at the same time as the retirement of older coal-fired power stations we’ve traditionally relied on for our baseload power.
We are tackling these challenges through a number of measures, including: the COAG Energy Council reform agenda; the Chief Scientist’s Review into the Future Security of the National Electricity Market; and the 2017 Review of Climate Change Policies.

The COAG Energy Council commissioned the Chief Scientist of Australia, Dr Alan Finkel, to undertake an independent review into the Future Security of the National Electricity Market. The review is due to report to COAG in June 2017 and will deliver a blueprint to maintain the security, reliability and affordability of our energy.

The energy sector is fundamental to Australia’s functioning and prosperity.

The secure supply of energy to industry is a priority for the Turnbull Government and we will continue to work on measures to ensure sectors like manufacturing can count on reliable, affordable and safe energy supplies well into the future.

Senator Arthur Sinodinos is the Minister for Industry, Innovation & Science.

[1] PM’s Press Club speech
[2] ABS Labour Force data 6291.0.55.003 table 6 (and table 4 for seasonally adjusted data)

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