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Australia firms up energy policy

08 Nov 2012 05:16 GMT

Melbourne, 8 November (Argus) — The Australian government today released its energy policy paper calling for greater deregulation of its electricity sector, overhauling the planning approval process for resource projects, moving to a lower emissions economy, greater energy security and remaining a competitive regional energy supplier.

Today's release reiterated many of the conclusions reached in the draft energy white paper released on 11 December last year, such as suggesting state governments sell their interest in energy assets as part of a wider reform of the domestic energy market. State governments largely own power transmission and distribution networks.

Australian energy and resource minister Martin Ferguson said that he will be meeting with his state counterparts on 7 December to discuss the reform proposals, aiming to craft necessary legislation to be voted in federal and state parliaments during the next 12 to 18 months. The energy policy paper is the first since the ruling Labor party came to power in November 2007.

“The energy white paper is about laying the foundation for sound energy policy development in this country for years to come,” Ferguson said. “It faces up to major challenges such as rising energy prices, pressures in Australia's gas markets, remaining competitive in the development of our energy resources, maintaining our liquid fuel security and bringing new clean energy technologies to market.”

Ferguson acknowledged that energy supplies and demand were being influenced by forces not predicted 12 or 18 months ago.

Australian gas producer and utility AGL Energy today also released a presentation showing there was little to no forecasts for new gas-fired power stations in Australia by 2020 amid slower power demand growth. This compares with 2009 when 8,300MW of gas-fired capacity was estimated to be required by 2020 and down from the 2006 forecast of 10,000MW. AGL forecast 9,950MW of renewable power capacity to come on line by 2020, which accounts for more than 95pc of projected new power installation.

“We have lost some demand from the industrial sector, we are seeing people consuming energy more efficiently and we have seen roof-top solar prices come down and this is all having an effect on electricity demand patterns,” Ferguson said.

Australia had greater scope to boost energy exports further, particularly from LNG. “I see a window until 2020, it is by no means certain that we can get it, but if we have the right policy frameworks in place, we remain cost competitive then I think you will see some more developments in LNG,” Ferguson said. Australia is currently building 61.8mn t/yr of LNG capacity to add to the existing installed capacity of 24.2mn t/yr.

“It is also important that all governments maintain an attractive investment environment through efficient, timely and consistent national planning, approval and regulatory process,” Ferguson said.

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