Australia to Amend Energy Laws to Rein in Soaring Gas Prices

Australian Federal Energy Minister Chris Bowen speaks to media following an energy ministers meeting in Melbourne, Australia, on Oct. 28, 2022. AAP Image/Diego Fedele

Australia’s federal and state energy ministers have agreed to amend the current energy laws to pave the way for short-term interventions in the energy market in an effort to bring prices down.

During a meeting in Melbourne, the ministers continued to progress reform areas agreed upon in the previous meeting in August as they were concerned that soaring international coal and gas prices due to the war in Ukraine were continuing to place pressure on domestic energy prices.

Specifically, the ministers agreed to make major amendments to the National Gas Law to grant new functions and powers to the Australian Energy Market Operator (AEMO).

This would allow the agency to manage reliability and gas supply adequacy for the east coast gas market over winter 2023 and beyond.

The energy ministers will discuss further details of this new framework in the next meeting in December after they consult with the industry.

They noted that the framework would be subject to review by the Australian Energy Market Commission within three years.

Another Amendment to Gas and Energy Retail Laws

In addition, the ministers agreed to extend both the National Gas Law and National Energy Retail Law to hydrogen and other renewable gases to provide better support for developing a competitive and efficient hydrogen and renewable gas industry in Australia.

Speaking to reporters after the meeting, Federal Energy Minister Chris Bowen said all levels of government were committed to reducing energy costs.

“We have agreed we have levers at our disposal, and we intend to carefully, methodically use those levers wherever it puts downward pressure on prices,” he said.

“We will not act without strong evidence that whatever we do will actually work to give relief to Australian families.”

A kitchen gas stove burner at a residential property in Melbourne, Australia, on June 16, 2022. AAP Image/Joel Carrett

Pointing to a heads of agreement signed with three major Australian gas exporters to avoid a gas shortage in 2023, Bowen said the federal government would not leave consumers and businesses behind if prices go up quickly.

In addition, the minister said the long-term solution was to boost the supply of renewable energy together with transmission and storage, without mentioning nuclear power options.

Bowen’s remarks came as the newly released 2022-2023 federal budget forecasted that retail electricity prices would surge 56 percent in the next two years, while gas prices were projected to soar 40 percent in 2022 and another 40 percent in 2023.

Opposition Says Government Should Consider Nuclear Power

Meanwhile, in his budget reply speech on Oct. 27, Opposition Leader Peter Dutton said Australia should have an “intelligent conversation” on how new nuclear power technology could contribute to the energy mix.

“If you could put the small reactor … that can help us credibly achieve emission target and increase the number of electric vehicles, then why wouldn’t you consider it?” he later told the ABC.

“If you turn off coal, if you turn off gas, what firms up the renewable energy coming into the system at the moment?”

In a later interview with Sky News, Bowen refuted Dutton’s argument on nuclear energy, saying that it was the most expensive form of energy as Australia had to build the facilities from scratch.

“It would be absolutely unfeasible and unrealistic,” Bowen told the media outlet.

“Peter Dutton has decided to bank all his energy policy on that; he says he wants a ‘chat’ with the Australian people about it—okay, let’s have the chat, Peter. Explain where the small modular reactors will go, explain why you want the most expensive form of energy.”