COAG gas strategy welcomed

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 02 Sep 2016   Posted by admin

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By Elizabeth Fabri

THE Council of Australian Government (COAG) Energy Council meeting in August has been well received by industry officials following the release of the country’s most significant domestic gas market reforms in two decades.

State and Federal energy ministers met in Canberra on 18-19 August to discuss the emerging challenges facing gas and electricity markets as the country transitions towards a low emissions future.

To reduce gas prices and increase supply, the ministers agreed to establish two wholesale gas trading hubs, and arrangements for the trading of pipeline capacity after reviewing Australian Competition and Consumer Commission (ACCC) and Australian Energy Market Commission (AEMC) reports released earlier in the year.

A Gas Market Reform Group headed by Dr Michael Vertigan would be introduced to accelerate these changes, with one of Dr Vertigan’s first tasks working with ACCC findings to address the limited constraints on existing pipeline operators.

“Another key focus of the council will ensure consumers can confidently take advantage of new technologies such as battery storage through the introduction of appropriate consumer protections,” Environment and Energy minister and council chair Josh Frydenberg said.

“Council acknowledged the important role played by interconnectors in the National Electricity Market (NEM) and agreed to review regulatory settings to ensure they do not present barriers to appropriate investment in the current market environment.

“Officials have also been asked to provide advice on economic and operational impacts of existing and proposed state and territory emissions reduction policies on the energy system.”

The energy ministers agreed on a plan to increase onshore gas supply, apart from the Victorian government, which was still considering its position.

The council also agreed The Senior Committee of Officials would complete a review of the Limited Merits Review (LMR) regime by December 2016.

Clean Energy Council chief executive Kane Thornton said the meeting was an overall success but substantive reform would take longer than a day.
“The way our electricity system operates today is already very different to when it was first designed almost 20 years ago,” Mr Thornton said.

“The rise of solar and wind, and the coming of home batteries mean the way we think about energy in 10 or 20 years will be vastly different to business as usual.
“The kind of considered national energy strategy that is required will take time to negotiate and develop.”

Energy Network Association chief executive John Bradley supported the decision to accelerate the assessment of a new interconnector between NSW and South Australia, and increased onshore gas supply.

“Governments must remove unnecessary barriers to new sources of gas supply,” Mr Bradley said.

“It is surprising Victoria has not joined other states, given it is more exposed with its manufacturing sector, and large household gas consumption.”

The COAG Energy Council will meet next on 2 December 2016 in Melbourne.

 

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