Saturday Dec 02, 2023

No easing of power prices in short term: Bowen

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Energy costs will not ease much in the short term as Australians prepare for a power price hike on July 1, Energy Minister Chris Bowen admits.

Acknowledging the imminent price hike, Mr Bowen said it would take time to implement the government’s plan to transition to renewables and shore up the energy grid.

“It will take a while for our policies to work. I think people understand you don’t fix 10 years of neglect in 10 days,” he told the Nine Network on Thursday.

“We have to build 10,000 kilometres of transmission wires to get our system up and running. You don’t do that in six months, you don’t do that in a year.”

Mr Bowen also criticised the former government for delaying news of a power price hike due on July 1 until after the election.

“The old government sat on that prior to the election. It had to be released under the new government, the news that energy bills were going up,” he said.

“The old government knew about it but didn’t do anything to get the figures out before the election, surprise, surprise.”

Mr Bowen also flagged bringing forward the introduction of the capacity mechanism, which will help shore up energy supply, from 2025.

“I would like it to happen earlier than that. I’ll be working with the states and territories to try to make that the case, I’ve been clear about that,” he told the ABC.

“This is an important safety net.”

The Liberals have criticised Labor for telling Australians their power prices would come down if they were elected.

“The sense of panic that’s out there from Chris Bowen at the moment wasn’t there when the Coalition was in government,” Opposition Leader Peter Dutton said previously.

“What’s happening with the economy at the moment – I mean it always happens on Labor’s watch.”

The suspension of trading in the national energy market eased from Thursday morning, after the market operator indicated there would be enough capacity for homes and businesses.

Following a “clear improvement” in energy conditions, the Australian Energy Market Operator said it would begin a staged process that would bring the market back to normal.

The system was destabilised last week, prompting AEMO to take control to stabilise power supplies.

The energy market was able to start setting prices again from 4am on Thursday.

The market operator intends to completely lift the unprecedented trading suspension after monitoring conditions for 24 hours.

AEMO chief executive Daniel Westerman said there would be a step-by-step approach in lifting the suspension. He said there had been vast improvement to the market, with about 4000 megawatts of generation returned to the energy grid after outages.

“That means the risk of any shortfall has reduced markedly,” Mr Westerman said.

“We know many generators are working hard and closely with governments to improve the confidence of their fuel supply, to ensure that they are able to operate at their desired level of output.”

The market operator said it expected the system used to schedule energy generation into the grid would operate without failure.

This was due to a low volume of directions to generators and a reduction in forecast shortfalls of energy as electricity suppliers respond to market signals.

Australian Industry Group chief executive Innes Willox said the resumption of the national energy market was a sign of pressures easing in the sector.

However, he said the situation was far from normal.

“[This] is the first step on the road out of energy hell, and into purgatory, we could be here for a very long time,” he said.

“We are not back to normal and there is no basis for relaxation.”



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