SA power plan released - 16-Mar

AGL said it was pleased the SA government saw it as vital to secure more gas to improve competitiveness for the state's businesses.

"The most important problem, however, perhaps the real crisis is the difficulties faced by industrial companies who rely on gas as a feedstock or as an energy source", he said.

The company revealed that its New South Wales operations faced a 20% to 25% increase in gas prices and 50% in electricity costs within the next 12 months and said uncertainty in supply and expected increases impacted worldwide competitiveness and curtailed Australian expansion.

Turnbull called the meeting with gas suppliers following a warning by the energy market regulator of the possibility of blackouts as early as next year.

"What we have now is a scarcity of gas driven by politics, because state governments are not allowing exploration and development of onshore gas".

Malcolm Turnbull has threatened east coast gas suppliers his government will invoke its powers to control exports should they not make good on commitments to increase supply of the fuel into the domestic market.

"I doubt anyone in the industry expected Victoria to ban all onshore gas exploration and production which has stopped even conventional gas projects; nor could they have foreseen the delays and uncertainty over projects in NSW and the NT".

"So our gas consumption, as you would expect if we have 30 furnaces, is quite significant".

Asked whether the gas guarantee would make make any difference to the amount of money being paid by local industrial gas users, Turnbull said it would depend on the amount of gas available.




Cheryl Cartwright, from the Australian Pipelines and Gas Association, said the industry held sufficient capacity to ensure gas is provided when and where it's required.

"We don't know what the quantum of those price decreases will be, but we would certainly be hopeful that that was one of the outcomes."

Premier Jay Weatherill released details of the plan on Tuesday, March 14, saying the goal was delivering "reliable, affordable and clean" power.

"There was nothing that came out of yesterday's meeting that will be of any comfort to the manufacturers that can't find gas at an affordable price to keep their operations going", he told AM.

"In the longer term, South Australia will become more self-reliant for its power supply".

"Instead, he walked out of a talk-fest and gave some vague assurance that there would be a supply of gas for the power sector, but gave no comfort at all to the manufacturing industry". However, the volume of domestic gas, primarily from the states of Queensland and South Australia, diverted to Gladstone to fill cargo ships operating from the three new east coast coal seam gas (CSG)-to-LNG export terminals has surged from 2.3petajoules in the December 2015 quarter to 24 petajoules previous year.

"As our ACCC Inquiry pointed out Australia has enormous gas resources; gas availability is clearly not the issue".

"The Prime Minister made the point that no options have been taken off the table", he said.

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