The Victorian Chamber of Commerce and Industry is urging the Victorian and Federal Governments to adopt an alternative energy pathway as Victoria's energy crisis becomes a national issue.
In our latest policy paper Securing Our Energy Future, the Victorian Chamber states that new gas supply must be urgently prioritised to avoid imminent shortages impacting the east coast of Australia.
It's time to rethink our energy transition into two separate phases. The first is to shore up both gas and electricity in supply and deliver the lowest price. Once that is done, we can move to transitioning society to a net zero future.
With energy prices high, we have seen the impact on business. If supply is threatened, more businesses will make the decision to leave. We need to give business the certainty it needs.
To shore up gas supply will require new reserves being unlocked, LNG supplies being planned for, or increased pipeline capacity coming down from Queensland. Electricity has already been underpinned by an agreement to extend coal generators to operate longer.
As we move to renewables in phase two, an efficient and least-cost pathway for Victoria requires streamlining regulatory approvals, upholding technology neutrality, formally recognising emerging energies in pre-existing frameworks and incentivising supply and demand of novel gases and liquid fuels.
Victoria has the opportunity to develop these new clean energy industries and be a leader nationally and internationally. These novel industries in renewable gas, carbon capture and storage and renewable liquid fuels will translate into more jobs that would drive our local economy into the net zero future.
A pragmatic approach to net zero can be achieved through commercially realistic policies that provide investment assurance to industry. Currently Victoria is losing hundreds of millions of dollars in investment potential in a future natural and renewable gas industry. Regulatory barriers alone have resulted in $90 billion of possible renewable energy projects stalling.i
The impact of no action, and gas shortages will be devastating to Victoria's business and industry. The Longford Disaster in 1998 cost business $1.3 billion. In today's dollars, without taking into account population growth, that would be $2.6 billion per fortnight that gas is not available.
We believe collaboration between energy industry producers, retailers, pipeline and infrastructure companies, peak bodies and end-to-end users together with the Victorian Government is essential and urgent to ensure that gas remains in our energy system.
The Federal Government's Future Gas Strategy is the mechanism for addressing the urgent situation Victorian businesses now face, especially as it is apparent there are few viable and available alternatives to power our State.
To be attributed to Victorian Chamber of Commerce and Industry Chief Executive Paul Guerra:
"Our current trajectory is putting Victoria's prosperity at risk, as energy security and price cannot be guaranteed.
"Gas will be essential for transition to net zero. Equally, we need all our energy options on the table to overcome our current energy crisis.
"We need to shore up existing supply on energy to give us the runway to then move to a renewable environment in a cost-effective way. Supply disruption and price spikes will be dire for business. In the immediate term, we need new gas supplies, as current ones are now at risk.
"New clean energy industries will create enormous economic and environmental benefits, but the transition must ensure an affordable and available supply to power Victoria into this next stage of prosperity."
