Plan to bring Australian electricity prices down
The Prime Minister will unveil a new plan to secure Australia’s supply of liquid natural gas and bring down electricity prices when he visits Newcastle on Tuesday.
In a $52.9 million package to be announced in the upcoming Budget, the Federal Government will work to tap into gas supply in mines not being used, increase production, and use new pipelines to reduce domestic costs.
The move is expected to help bring down electricity prices and stabilise Australia’s own stockpile, while allowing the gas to serve as the backbone for a lower emissions national electricity market.
Natural gas complemented renewable energy by “keeping the lights on when the sun isn’t shining and the wind isn’t blowing”, the Prime Minister’s office said in a statement.
To achieve an increase in the nation’s gas reserve, the Federal Government is expected to cut deals with the states to help unlock supply.
Prime Minister Scott Morrison said the new gas deal will form part of the government’s JobMaker plan, with a separate $250 million investment in new pipeline links expected to create thousands of jobs.
“These links will help put downward pressure on prices, shore up the reliability of our energy grid and create over 4000 jobs,” he said.
“Our plan for Australia’s energy future is squarely focused on bringing down prices, keeping the lights on and reducing our emissions and these interconnectors bring us a step closer to that reality.”
Mr Morrison said the price of gas would become “internationally competitive”, and that more gas would be available in Australia, instead of exported overseas.
“We’ll work with industry to deliver a gas hub for Australia that will ensure households and businesses enjoy the benefits of our abundant local gas while we hold our position as one of the top global liquefied natural gas (LNG) exporters,” he said.
“This is about making Australia’s gas work for all Australians. Gas is a critical enabler of Australia’s economy.
“Our competitive advantage has always been based on affordable, reliable energy. As we turn to our economic recovery from COVID-19, affordable gas will play a central role in re-establishing the strong economy we need for jobs growth, funding government services and opportunities for all.”
Energy Minister Angus Taylor said investing in Australia’s gas supply would “help Australia’s economy bounce back better and stronger”.
“We are building a robust and competitive gas industry that will allow both gas producers and users to thrive, with lower prices and lower emissions benefiting all Australians,” he said.
The announcement comes after a report from BIS Oxford, commissioned by the Australasian Refineries Operatives Committee, warned Australia’s fuel supply left it vulnerable to serious shortages if there were to be a major disruption, such as a shipping crisis or war.
Liquid fuel security was found to be particularly vulnerable, with just over 50 days of stock, not including fuel en route to Australia, leaving it well below the International Energy Agency’s 90-day rule.