AN “all hands on deck” attitude is needed to solve the nation’s energy price crisis, the chief economist for power company AGL has warned.
Tim Nelson told an AI Group energy forum in Albury on Wednesday that immediate action was needed to tackle high power prices.
“A solution to this problem in five years time is a nice thing, but we really need a solution now,” Dr Nelson said.
He said public policy makers, retailers and consumers had to highlight the problem to show why more supply was needed.
AI Group’s principal national public policy adviser Tennant Reed said wholesale electricity and gas prices were doubling. He said there was a demand in Australia for 600 to 700 petajoules of gas per year and a shortage of 180 petajoules with 1300 petajoules being exported.
Even if bans on seeking gas were lifted in states such as Victoria and NSW it would require three to five years for significant gas to enter the market, Mr Reed said.
Member for Farrer Sussan Ley criticised state governments for halting gas exploration.
“We have effectively been sleepwalking into an ideological energy policy which is fracturing,” Ms Ley told the forum.
She said all governments “do have to own this problem” and the social costs of price rises “should not and must not be ignored”.
The general manager of Ettamogah factory Overall Forge, Dean Levey, said his total gas bill was likely to jump 147 per cent.
He queried why Victoria’s coal-fired power station Hazelwood could not have its closure date extended to ease the impact on prices.
Mr Reed said he had been told it would cost $100-$400 million to bring Hazelwood up to WorkSafe standards.
“We’re in a situation where you’ve been driving a Kingswood for 20 years and you can’t keep it on the road for very much longer or you’ll get called in by the cops and a new car is going to cost you a lot,” Mr Reed said.
Foundry owner Doug Evans, of Mulwala, said for governments the needs of overseas shareholders in energy firms should not override the concerns of those operating businesses at places such as Howlong and Ettamogah.
Mr Reed said gas supply could be added by government incentives to companies, swap deals between overseas buyers and domestic suppliers and the lifting of exploration bans.
“Even if we do all the cleverest options we’re going to have higher prices than we used to have,” he said.
Mr Reed said contracts with gas companies were unlikely to be torn up by governments, akin to the Victorian government’s East-West Link move, because there was the potential for “squallions” of dollars in payouts.