Renewables action vital to counter ‘apocalyptic’ Australian power prices

Lack of coal generation and high demand of gas for power have drastically increased energy prices in Australia to a record first quarter not seen since Q2 2019. Image: Lightsource bp.

A strategic and renewables-heavy response to “apocalyptic” power prices witnessed in Australia has been called for by the Australian Industry Group (Ai Group).

The national employer association puts the recent increase of energy prices down to fossil fuel issues – primarily blaming a lack of coal generation, which has in turn caused a spike in demand for gas – and the ongoing invasion of Ukraine impacting international coal and gas prices.

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Innes Willox, chief executive at Ai Group, said: “All of Australia’s former energy strengths – our reliance on the legacy coal generation fleet, large gas resources and a deep entanglement with export energy markets – are working against us in the current circumstances.”

A solution to deter price rising for businesses and homeowners alike is “not going to be simple” said Willox, mentioning supply chain issues, a lack of skilled workers and nimbyism as some of the issues renewable energy is facing in Australia.

While long term solutions are being implemented and dependence on fossil fuels is reduced, the association demanded quick solutions that would be “swift, targeted and have a clear handoff” that would help vulnerable industries and households.

This announcement comes days after newly elected prime minister Anthony Albanese pledged to make the country a renewables “superpower” after his Labor Party’s victory in the federal election.

“The new Albanese Government has an unenviable but urgent task in responding to this crisis. It is not one they can or should take on alone,” said Willox.

Earlier this month, the latest edition of Australian Energy Market Operator’s quarterly energy dynamics report showed that the first quarter of the year price increased by AU$35, to AU$87/MWh and reached an all-time high since Q2 2019.

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