The Business Council’s submission on government energy plans backs direct support for consumers struggling with high prices but sounds a warning bell on price caps and market intervention that create investment uncertainty and risk, Business Council chief executive Jennifer Westacott said.
“It is crucial that we find a way through this challenge that shields the most vulnerable and once and for all gets our energy system on track for the future. The plan before the parliament now risks simply kicking the energy can down the road and hampering a smooth transition without a commitment to longer term reform.
“A mandatory code of conduct and price caps won’t deliver sustainable relief and will make our supply problem much worse over time.
“Australians are being smashed by high prices because more than a decade of indecision and ad hoc intervention has driven an east coast gas crisis, leaving them exposed to the war in Ukraine and global energy chaos.
“We can’t force Australians another decade from now to pay for our mistakes, so we have to use this crisis as an opportunity to get on with reform that drives certainty and stability.
“All the states and territories should recognise that gas and coal will be critical to our energy system for some years, not just to drive affordability and security but to deliver the stability needed to let the nation get on with decarbonisation.
“The worst thing for our transition and the community would be a system that simply flicks the switch off on old generation, driving price spikes, putting the reliability of the system at risk and sending perverse investment signals.
“We should get on with work to streamline approvals and get new gas supply into the market, including work to reduce the red tape that adds friction to the system and slows projects down.
“Slow and complex approvals processes mean projects like Narrabri with gas slated for the domestic market have been held up for years, adding to our supply problem and forcing consumer prices higher.
“And, we have to address the deep structural issues in our energy system that are sending the wrong signals on firming capacity, the exit of coal and gas and aren’t attracting the investment needed to drive decarbonisation.
“Governments across the country have to remember that the businesses will need to drive decarbonisation with huge investments in hydrogen, batteries and emerging technology, are the same companies now receiving a very confused investment signal.
“Without long term reform, Australians will stay stuck in the same old energy loop with one crisis followed by new, heavy-handed intervention that sets us up for the next round of chaos, higher prices and uncertainty.
“We need a planned transition that keeps energy affordable for big users and households, and that means building the new system before we turn the old one off.”
Read the Business Council’s submission here.