Industry welcomes state energy plan

03/03/2011 - 10:37


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The DomGas Alliance and APPEA, who are normally at odds with each other on energy policy, have backed Energy Minister Peter Collier's discussion paper to shape the next 20 years of energy regulation.

The DomGas Alliance and APPEA, who are normally at odds with each other on energy policy, have backed Energy Minister Peter Collier's discussion paper to shape the next 20 years of energy regulation.

But the Chamber of Commerce and Industry says it is disappointing that the paper is six months late, and the state opposition has claimed the Barnett government's performance in the energy sector to date had not reflected key planks of the report.

Mr Collier released the Strategic Energy Initiative: Energy 2031 paper today, an initiative that flags a reduced reliance on imported fossil fuels, the development of efficiency targets and a more diverse energy mix by 2031.

National modelling by the Australian Bureau of Agricultural and Resource Economics has forecast energy demand in WA to increase by 60 per cent to 2029-30, at an annual growth rate of 2.2 per cent.

But the Chamber of Minerals and Energy estimated the demand for electricity by the mineral and energy sectors alone would increase by 20,000 gigawatts hours per year over the next 10 years, which is more than the current total demand for energy in the South West Interconnected System.

Mr Collier said the plan would provide households and industry clarity regarding the energy sector's direction.

"The state lacks a cohesive, long-term energy policy, something which industry has been seeking for a number of years," Mr Collier said.

"Our vision for the next two decades paints a picture of an energy system to meet strategic goals of secure, reliable, competitive and cleaner energy for WA.

Mr Collier said the plan was based on a series of key strategies, including: promoting security and diversity in energy supply and fuels; ensuring efficient provision and utilisation of energy infrastructure; improving the energy efficiency of the WA economy; maintaining continuity of energy supply; ensuring effective and efficient downstream markets; and ensuring universal access to essential supplies.

DomGas Alliance chairman Tony Peterson said the paper set a clear way forward on domestic gas security.

He said the Alliance supported key measures proposed by the paper to promote domestic gas supply, including: tightening the state's domestic gas reservation policy; discouraging the warehousing of gas, tax and royalty incentives for domestic gas exploration and development; an open-access offshore exploration regime; promoting market development and transparency; and facilitating common use infrastructure to cut gas development costs.

"All of these initiatives are practical and readily available for government to put in place," Mr Petersen said.

"Gas users will continue work with the State to expand on these proposals with the final Energy 2031 paper expected later this year."

APPEA Western Australia director Stedman Ellis said the paper made a significant contribution to informed energy decision and policy development in Western Australia.

The paper points to gas production capacity which more than meets anticipated domestic demand delivered from a more competitive energy market, Mr Ellis said.

""Natural gas has the potential to meet the SEI strategic goals to provide West Australians with secure, reliable, competitive and clean energy, as well as being a significant and expanding contributor to export earnings and economic growth in the State over the 20 year period set for this framework," he said.

"Importantly, the directions paper points to a gas supply and demand outlook which indicates that the projected gas production capacity over this period is more than enough to meet the projected growth in demand.

"In the next five years alone, domestic gas supply will increase by over 50 per cent (to 1500 TJ/d) or higher if new supply from gas fields matches the installed capacity of production facilities.

"This reflects the impact of competitive gas prices in WA which have triggered the biggest domestic gas development effort in almost three decades: Devil Creek is being constructed, the Halyard and Spar fields are being developed, both Macedon and Gorgon are marketing their domestic gas right now, and there are others like Wheatstone being proposed.

"Within five years, this will result in the number of major gas supply hubs in WA increasing from two to five greatly increasing competition and diversity in the market."

Western Power chief executive Doug Aberle also welcomed the directions paper, saying it provided the guidance needed to make investment decisions prudently and efficiently.

"Western Power is particularly pleased to see a strong emphasis on developing a smarter network to support the State's future energy needs while emphasising the importance of being more efficient in the way we consume energy," Mr Aberle said.

"It is important to provide clarity, not only for industry and policy makers but also for the public, who are increasingly voicing an interest in more sustainable energy options."

CCI chief executive James Pearson said the need for a clear long term strategy to ensure business and industry has security and certainty of energy supply has never been more important.

"While the report makes more than 100 recommendations to ensure the state's energy needs are met, it is imperative that government works closely with industry to identify the priority issues and ensure they are implemented quickly," Mr Pearson said.

Opposition spokesperson for Energy Kate Doust was blunt, saying the plan was "light years" away from where Energy Minister Peter Collier is headed.

"The issues in the report are not new and the Barnett Government has had two and-a-half years to act on many of them," Ms Doust said.

"The report suggests energy distribution networks needed to be extended or strengthened, yet the opposite has occurred.

"The Barnett Government has still not started building, or even approved the critical 330Kv transmission line from Perth to Geraldton.

"The report stated adequate protection for all gas consumers should be an objective yet the Barnett Government has done nothing to protect regional consumers who are paying a premium for bottled gas.

"Their inaction and bungling of energy infrastructure maintenance and expansion is costing Western Australia's economy."

Ms Doust said the Barnett government had not committed significantly enough to renewable energy to meet the 2031 vision, which requires a large proportion of WA's needs to be met by renewables.

"We've seen grants and programs promoting renewable energy cut, along with the Sustainable Energy Development Office," she said.

"The Barnett Government also back-flipped on its promise to introduce a gross feed-in tariff.

"Having a direction for Western Australia's energy future is important but more than just a bunch of words and visions is needed.

"The only direction the Barnett Government has taken Western Australia is towards a future of higher tariffs."

The directions paper is the result of considering 67 written submissions and issues raised at 11 regional consultation forums and three industry workshops from December 2009 to June 2010.

Written submissions to the directions paper will be accepted until May 6.


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