Australian Energy Market Operator to have power to acquire gas for emergencies

The Australian Energy Market Operator will be given the power to procure and store gas for release in emergency situations.

This was one of a range of measures federal and state energy ministers decided at their Wednesday meeting to discuss the gas crisis.

The ministers also agreed to the preparation of a national transition plan for the bumpy road to a clean energy economy.

And work on a “capacity mechanism” is to be advanced as a priority. This mechanism would provide incentives for dispatchable power to improve reliability as the system moves to renewables.

It was not clear whether coal and gas would be excluded from the mechanism.Federal energy minister Chris Bowen said the meeting, which included Labor, Liberal and Greens ministers, was marked by consensus and team work.

But he stressed there was “no silver bullet” for the current crisis. “We need more transmission, we need more renewables, we need more storage,” he said.

The ministers only discussed initiatives involving federal and state governments. This ruled out consideration of an east coast reservation scheme, which would be a matter for the federal government alone.

The meeting received briefings from market regulators and operators on prices and volatility in the energy sector and potential actions that could be taken.

The ministers agreed their governments must be ready to implement further measures, but said they must be consistent with domestic and international commitments.

They expressed their trust in the energy market bodies who operate and regulate the system.

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The Australian Energy Market Operator is to provide an urgent update on the east coast gas supply and demand situation, identifying any market constraints. It will advise the energy ministers’ July meeting on further actions needed.

That meeting will receive advice from the Australian Energy Market Commission on improving resilience in the system and better managing retailers’ failures.

The Australian Competition and Consumer Commission will also provide a report to the ministers.

Read more: Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia

Bowen told a news conference on Wednesday evening the meeting was never designed to solve all problems but it gave the regulators “more tools to do the work that is necessary”.

Treasurer Jim Chalmers earlier again ruled out a super-profits tax on gas producers benefitting from soaring international prices.

He also dismissed calls for Australia to consider developing nuclear energy, saying the economics didn’t stack up.