Australian Pipelines and Gas Association (APGA) Chief Executive Officer, Steve Davies, believes that if Australia fails to develop a comprehensive energy policy it will carry a heavy cost in lack of future investment in the infrastructure needed to ensure energy supply can meet future demand.
Speaking ahead of the AFR National Energy Summit being held in Sydney this week, Mr Davies said that Australia’s energy system has been described as ‘a slow-moving train wreck travelling through a rapidly changing landscape of disruptive new technologies that offer lots of potential but not yet the supply security and reliability our energy system needs’.
“Developing a policy that looks at the nation’s long-term energy needs amid continually changing technology and a highly-charged political environment is a very difficult task,” he said, “but the cost of failing to do so is much higher than we seem capable of imagining.”
Mr Davies further commented that securing Australia’s energy future requires making decisions to invest in high-value infrastructure that can be years in development, and that these decisions will not be made unless investors can be sure they will be able to get a return. A long-term energy policy that has bipartisan support will create the environment needed for these investments. Without them, he said, we are jeopardising our future energy supply.
“We have seen what happens when there is a supply shortfall: prices go through the roof. We need only look to the domestic gas market for confirmation that low supply ends up in high costs.”
“Energy policy issues are complex: they include the east coast gas supply crunch, the enduring challenges of linking energy and emissions policy, the setting of regulatory tariffs for energy infrastructure at levels that satisfy consumers and investors and addressing the market concentration of power generation to name a few.”
In concluding his statement, Mr Davies said that trade-offs will be needed and the costs of those must be explored and mitigation considered.
“Throwing in the towel on energy policy is not the answer, and a narrow, short-term focus on the retail price of electricity is no substitute for the substantial policy our nation needs.”