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Unlocking More Gas for Australia

The Government is focused on delivering affordable, reliable and secure electricity for Australian households and businesses.

 

This is central to our ongoing economic recovery and will support jobs, productivity and economic growth. 

 

A gas-fired recovery is a key component of the Government’s JobMaker plan. We will work with industry to ensure that the Australian gas market is working to benefit all Australians.

 

As part of our economic recovery, we will deliver more gas to where it is needed at an internationally competitive price.

 

We are building a robust and competitive gas industry that will allow both gas producers and users to thrive, with lower prices and lower emissions benefiting all Australians.

 

Our plan is working, we have seen wholesale electricity prices fall for 12 months in a row, and they are now at their lowest level in five years.

 

But there is more to do and now we need to ensure these prices stay low as our community recovers from the impact of COVID-19.

 

Gas is a critical enabler of Australia’s economy. It supports our manufacturing sector, that employs over 850,000 Australians and is an essential input in the production of plastics for PPE and fertiliser for food production.

 

Increased gas supply will help to continue to put downward pressure on energy prices, providing much needed support to Australian workers and families.

 

As we saw in Victoria with the closure of Hazelwood, there are real risks to affordability and reliability when large coal-fired generators exit the market.

 

That’s why the Government is setting a target for the electricity sector to deliver 1,000 megawatts of new dispatchable energy to replace the Liddell power station before it closes down in 2023.

 

Closing the plant without adequate dispatchable replacement capacity risks prices rising by around 30 per cent over two years. This would be an unacceptable outcome for families, businesses and industry.

 

To protect families and businesses against the risk of price rises, the Government will step up and back a new gas power plant in the Hunter Valley if the private sector doesn’t replace Liddell’s capacity.

 

Australia’s competitive advantage has always been based on cheap energy, and gas will be central to our ongoing economic recovery.

 

Gas also provides the firmed electricity generation that we need to balance the record levels of increased supply from solar and wind. It provides flexible, reliable, affordable generation. Far from competing with renewables, it complements them.

 

Australia has seen a record level of investment in renewable generation with investment in the renewables sector remaining strong even during the COVID19 pandemic.

 

The Clean Energy Regulator’s latest Quarterly Carbon Market Report estimates total delivered additional renewable capacity for this year is likely to match the record 6.3 gigawatts (GW) set in 2019.

 

That’s the equivalent of 920,000 homes putting solar panels on their roof every year.

 

But as more renewables come into the grid,  we need firming capacity. Firming keeps the lights on when the sun isn’t shining and the wind isn’t blowing. 

 

Renewables also need integration and storage. That’s why part of our energy plan includes commitments to important transmissions projects like Marinus Link, HumeLink and the QNI Interconnector.

 

We’ve announced that the Commonwealth will work with state governments to accelerate the Project Energy Connect.

 

This project will link SA to NSW and will provide SA with access to energy on the East Coast including Snowy 2.0.

 

New transmission investments like Project Energy Connect will help put downward pressure on prices, shore up the reliability of our energy grid.

 

These projects will help create thousands of jobs while also ensuring that we have access to the affordable, reliable energy Australian families and businesses rely on.

 

Our plan for Australia’s energy future is focused on bringing down prices, keeping the lights on and reducing our emissions.

 

A gas-fired recovery will help Australia’s economy bounce back better and stronger while supporting our growing renewable capacity and delivering the reliable and affordable energy Australians deserve.