Sydney, 7 August (Argus) — Australia's government has delayed the release of its energy white paper setting out the sector's priorities, to allow it time to focus on reducing soaring electricity network costs and overcoming regulatory hurdles in the gas market.
The paper was due to be released this month but has been delayed to later this year, probably in December.
Australia's resources minister Martin Fergusson said today that he was struggling to help state governments work through their regulatory framework for coal-bed methane (CBM) gas developments. Both New South Wales (NSW) and Queensland face significant community pressure to tighten regulations on the booming CBM industry, which is underpinning more than 30mn t/y of LNG projects on Australia's east coast. This has led to a projected shortage of gas, which has left domestic consumers unable to secure gas beyond 2014.
“We are moving to get a common approach by all regulators,” Fergusson told the Energy Policy Institute of Australia in Sydney today. But he admitted that it was particularly hard in NSW, where the state is under significant pressure from local communities to curtail the industry and is sitting on approvals that would previously have been granted.
Speaking at the same event, Australian prime minister Julia Gillard focused on the high network costs in Australia and blamed some states for pushing up electricity prices by pocketing high network charges. She said that the carbon tax, which her government introduced last month, had added only 10pc to electricity bills, while network costs had added 35pc to the average bill in NSW during the past four years. She tried to move the national energy debate towards reducing spending on unnecessary network upgrades and away from the carbon tax, sale of state-owned generation assets and retail electricity price regulation. She warned states that she will regulate if necessary to force them to stop over investing in networks at the expense of higher electricity bills, giving them until December to act.
When Canberra released the draft energy white paper in December it said there were four priority areas for further action — strengthening the resilience of Australia's energy-policy framework, reinvigorating the energy market reform agenda, developing Australia's critical energy resources and accelerating clean energy developments. But falling demand for electricity has moved the debate away from base-load power generation towards the rising costs of transmission and the high cost of peak demand electricity.
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