According to Australian Pipelines and Gas Association Chief Executive Officer, Steve Davies, failing to develop a comprehensive energy policy could lead to low future investment in critical energy infrastructure, making it difficult to meet demand.
“Australia’s energy system has been described as a slow-moving train wreck travelling through a rapidly changing landscape of disruptive new technologies that offer lots of potential, but not yet the supply security and reliability our energy system needs,” Mr Davies said.
“Developing a policy that looks at the nation’s long-term energy needs amid continually changing technology and a highly-charged political environment is a very difficult task.
“But the cost of failing to do so is much higher than we seem capable of imagining.”
He added that securing the future of Australian energy requires making decisions to invest in high-value infrastructure that can be years in development. These decisions will not be made unless investors can be sure they will be able to get a return.
“A long-term energy policy that has bipartisan support will create the environment needed for these investments. Without them, we are jeopardising our future energy supply,” Mr Davies said.
“We have seen what happens when there is a supply shortfall: prices go through the roof. We need only look to the domestic gas market for confirmation that low supply ends up in high costs.”
Energy policy issues are complex. They include the east coast gas supply crunch, the enduring challenges of linking energy and emissions policy, the setting of regulatory tariffs for energy infrastructure at levels that satisfy consumers and investors, and addressing the market concentration of power generation to name a few.
“There are no simple policy solutions to fix these energy challenges. Comprehensive policy considers competition, liquidity, reliability, transparency and flexibility. Get these right and the price will take care of itself,” Mr Davies said.
“There will be winners and losers. Trade-offs will be needed and the costs of those must be explored and mitigation considered. With such rapid changes taking place, we need to keep as many options on the table as possible.
“Throwing in the towel on energy policy is not the answer, and a narrow, short-term focus on the retail price of electricity is no substitute for the substantial policy our nation needs.”