This is obviously a complex area of public policy and Andrew regrets that he doesn’t have all the answers. What is clear though is that we need greater government intervention in the energy market, and to establish quickly a consistent policy framework so that the industry can invest with confidence.
Increasing both capacity and supply is crucial to lowering prices. To this end we need to stop exporting excessive amounts of gas and Andrew supports the restriction of exports if required. Increased capacity and technological advance, particularly in renewables, should be a priority. We are fortunate in Tasmania in this regard and we should further capitalise on our strength as a producer of hydro and wind power. The revenue we collect from selling clean energy to the mainland should be used to subsidise household electricity and gas expenses when national prices become high.
Competition is the other important dimension. Andrew welcomes the establishment of an ACCC monitoring regime of competition and prices in the gas market, and a number of measures to improve price transparency that arose from the Government’s discussions with the CEOs of power companies. In Tasmania, there is still a notable lack of competition in retail of electricity and gas following deregulation in 2014. More retailers will come to the table over time, but the State Government could look at doing more to incentivise new entrants in these early stages.
Finally, we need to arrive at an acceptable price on carbon, using one of the several instruments at our disposal. If the industry is satisfied that governments will adopt a consistent approach to carbon pricing, it will be able to invest in new electricity generation capacity with greater confidence.