Labor Government Says Coal Fired Power Must Be Switched on to Deal With Soaring Energy Costs

The Liddell coal-fired power station in the Hunter Vally of New South Wales, Australia. Taras Vyshnya/Adobe Stock

The new Australian government has called on the energy producers to bring coal-fired power stations back online as the country continues to look for ways to deal with soaring energy prices.

Resources Minister Madeline King told Radio National on June 7 that while meetings with gas producers like Santos had been constructive with some companies already releasing extra supply, she conceded Australia was still reliant on coal-fired power plants.

“In the very short term, what we really need to do is to have the coal power stations come back online because that is the missing piece of the puzzle right now,” King said. “There’s been unplanned outages for many reasons, many beyond the control of those operators—and I do accept that—but I hope they’re doing their best to make sure this power source comes online as well.”

She and Energy Minister Chris Bowen had spoken to operators who knew “what they have to do.”

She also blamed energy companies themselves saying power stations needed to be fixed so that the current 30 percent supply shortage could be eliminated.

“Labor is going to let them do their work and urge them to do it as quickly and as safely as possible so we can get this power back online to feed the southern states of Victoria and New South Wales,” she said.

Gas prices in Australia have risen to “apocalyptic” levels with Prime Minister Anthony Albanese conceding there was little to be done to alleviate the crisis which has hit during a winter polar vortex.

The energy shortage has been known about since February 2022 with the Australian Competition and Consumer Commission (ACCC) warning that Australia’s gas outlook from 2022 onwards was tight unless steps were taken to boost domestic supply.

A report by the ACCC outlined that South Australia, New South Wales, Victoria, and Tasmania would see demand exceed supply.

“There is a gas shortage forecast for Australia’s southern states from as soon as this year, which is likely to continue next year and beyond,” former ACCC Chair Rod Sims said. “Southern states will be reliant on gas from Queensland until additional supply from new sources comes on.”

Speaking to ABC Radio in Perth on June 3, Albanese blamed the crisis on the Ukraine War, the former Coalition government, and the local gas sector—which has raised wholesale prices in response to increased global demand.

“The short-term challenges, the immediate challenges which are there are a product of things beyond any government’s control, with regard to what has occurred with Russia and Ukraine, and the consequential significant hike in global prices are beyond people’s control,” he said.

“But what was in the government’s control was actually having an energy policy. And we’ve been through nine years of no energy policy. We had a lot of rhetoric from the former government about a gas-fired recovery for year, after year, after year, and no real policy changes were put in place that are appropriate. This is a direct consequence.”

However, former Coalition energy minister and now-Shadow Treasurer Angus Taylor disputed the claims.

“The key to this is working closely with the big gas producers, not demonising them, recognising that they are part of the answer to our energy system, including an energy system that is reducing missions and working with them to get more supply into the market,” Taylor told Sky News Australia. “We did that with the work we did with Narrabri, investment in extra pipeline capacity, investment in storage down in Victoria.”

The former Coalition government sought to offset the current gas crisis by working to bring new gas supply into the market, including $50.3 million (US$37 million) for seven infrastructure projects across Australia’s east coast and the Northern Territory, as well as and a $32 million (US$24 million) loan to accelerate the Golden Beach project near Victoria.

Taylor at the time pledged to lower costs for households and businesses, saying Europe had become an example of how risky it was for countries to be over-dependent on gas imports.

Daniel Khmelev contributed to this report.