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AEMO ordered to store gas - Minister

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9th June 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Following the meeting of Energy Ministers this week, the federal government has tasked the Australian Energy Market Operator (AEMO) to source and store a strategic supply of gas.

Speaking in interviews following the Energy Minister’s meeting, federal Climate Change and Energy Minister Chris Bowen said that the meeting had resulted in an 11-point plan to help curb the energy crisis currently faced by the Australian market.

While some of the action points could be applied quickly, others would take longer to implement, Bowen said.

One of these action points was authorising the AEMO to buy and store gas, to distribute in times of crisis.

“We made immediate decisions like giving AEMO power, the market operator, to be able to supply gas and keep it in store for situations like last week so we're not on the phone to gas companies, so that AEMO has some in store.

“And we made longer-term decisions like a properly integrated national plan to transition to renewables and to have investments across the board, not only in electricity transmission but in all the necessary infrastructure. That was really important. That's not immediate but it's really important going forward.  

“We made other decisions as well about capacity mechanisms to ensure we have some backup for difficult times. So, it was a really good meeting, steps forward but no easy fixes,” Bowen said.

While the capacity mechanism had initially been scheduled for 2025, Bowen said that the government would work to implement it "much more quickly".

“We've instructed the Energy Security Board (ESB) to come out with the next draft urgently. That work is very well advanced they've told me and that will be out in the next couple of days.  

“We have said we want it to support new investments in renewable and storage, so that's important. That'll be an important thing going forward. The ESB, I want the experts to write it and I want the experts to put out the next draft, but we have said we want that to happen as quickly as possible. I'll back the experts in getting that done,” the Minister said.

The Australian Petroleum Production & Exploration Association (Appea) said this week that the oil and gas industry recognised the issues confronting the east coast electricity markets, and vowed that gas suppliers would continue to work constructively with regulators and governments on a way forward.

Appea said it was important the whole energy system was considered given recent pressures on gas supply were caused by coal-powered generation outages and the inability of renewables to input power as required.

“These are highly complicated regulatory matters and we look forward to continuing consultation with regulators and governments to resolve them,” Appea acting CEO Damian Dwyer said.

“[The]meeting recognised the critical role the gas sector plays in meeting the energy security needs of the nation. We are doing everything we can to look after customers and fill the energy void left by coal-fired power generators in particular.

“Gas companies have already acted to ensure gas flows to where it is needed using the mechanisms put in place to help us do so – mechanisms which provide the market with transparency, affordability and supply.

“As [the] meeting reaffirmed, gas is delivering energy security to Australia and the current situation highlights the critical role gas will play in decades to come, replacing higher emissions coal and as a stabliser for renewables when the wind doesn’t blow and the sun doesn’t shine.

“But to do that needs more investment certainty. Natural gas gives the energy system stability. But the industry needs an investment environment that supports stability. Years of needless state moratoriums, bans and delays, have only contributed to the situation the east coast energy market is now in. The industry has invested over A$20-billion on supply in the past 18 months. More can be invested under the right investment settings,” Dwyer said.

Edited by Creamer Media Reporter

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