Blackout warnings lifted for weekend as national cabinet weighs energy solutions

In a statement released after the national cabinet met, state and federal leaders said they would continue to work together on energy policy.

Albanian told a climate summit on Friday evening that high prices for gas and coal made the switch to renewable energy even more urgent.

“Australia recognizes that climate change is not just a problem to be solved, but also an opportunity to be embraced,” he said in an online address to the Major Economies Forum hosted by US President Joe Biden.

“With gas and oil prices rising, the advocacy for the transition to safe, reliable and affordable clean energy has never been stronger.

“Our policy means that renewable energy will contribute 82 percent of our national energy market by 2030.

“My ambition is for Australia to become a clean energy superpower.”

With the energy regulator predicting that peak gas demand in winter could exceed supply in the long run, federal and state political leaders have been unable to reach a consensus on whether Australia should develop Narrabri or other gas fields.

Gas is used to fuel fast-start plants, which some experts say is a perfect complement to the increasing amounts of renewable energy entering the grid. However, some environmental advocates warn that increased reliance on fossil fuels will slow the shift of polluting energy sources.

Perrottet said the Narrabri gas project in northern NSW would hold the key to future energy security.

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“We are fully committed to Narrabri and are working with Santos to get that project off the ground,” he said. “An important part of that agreement, and the work we’ve done with Santos, is that there’s a reservation policy associated with that project that they’ve supported and agreed to.”

Santos is seeking approval to start production at Narrabri in 2026 to supply gas through a pipeline that will connect Sydney and Newcastle, with the promise that all gas will go to the domestic market.

Narrabri is expected to deliver 70 petajoules annually over a 25-year period. AEMO said in March that there was a “growing problem with gas supplies in the Southeast from 2023,” although it predicted demand would fall from about 125 petajoules in 2023 to less than 100 petajoules in 2024.

Federal Minister of Resources Madeleine King supported the Narrabri project this week, but was criticized for it by the Labor Environment Action Network, Greens leader Adam Bandt, Greenpeace and others. King also said the Victorian gas restrictions hindered future supply

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Andrews stuck to his policy of banning coal gas extraction, but said it was up to gas explorers to advocate for new projects outside of that ban.

“I’d say there are processes to go through and if gas is found and if someone comes up with a proposal, there’s nothing to rule that out,” he said.

“But we don’t apologize for doing exactly what we said we would do. We have sought a mandate, we have no fracking in the state and we are very, very proud of that.”

The rapid onset of cold weather has highlighted the country’s need for gas. According to the AEMO, about 60 percent of the power in the national electricity market came from coal last year, compared to 7 percent from gas-fired power plants and 33 percent from renewable energy sources.

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But in the 24 hours to Friday afternoon, gas provided 16.2 percent of electricity, due to outages at coal-fired power plants. Another 57.4 percent came from coal and 25.8 percent from renewables.

With gas production in Bass Strait dwindling, the federal government wants to accelerate the shift to renewables, but recognizes the need for more gas and is considering a reservation policy to force exporters to ship more gas to the local market.

One option is to cut exports from Queensland by breaking long-term contracts, allowing supplies to move south through pipelines. There is no terminal in NSW or Victoria to get gas from Western Australia. Andrew Forrest’s LNG importing firm in Port Kembla has said it could begin imports in 2023. The Victorian government is against an import terminal at Western Port.

Federal Energy Secretary Chris Bowen has agreed with his counterparts to develop a gas storage facility, but has yet to say how big it would be, where it would be or how quickly it could be built.

Cut through the hubbub of federal politics with news, opinions and expert analysis from Jacqueline Maley. Subscribers can sign up for our weekly Inside Politics newsletter here.

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