A competitive energy market should determine power costs for Australians, the federal energy minister says.
Since being appointed to the role in late August, Angus Taylor has solely focused on lowering power prices, but has not been able to suggest what an appropriate cost is.
“At the end of the day, competitive markets determine that,” the minister told the ABC’s The Business program when asked what Australians should pay for their power.
“I’m trying to achieve more competition which I know will lead to lower prices.”
Mr Taylor hopes he doesn’t have to use the government’s proposed “big stick” legislation, which could see the court-ordered divestment of energy giants if found to be jacking up prices.
“It’s broader than divestiture, it’s actually more about tackling bad behaviour,” Mr Taylor said.
“I’ve got no problem with companies making a profit, what I’ve got a problem with is anti-competitive behaviour.”
The plan has come under fire from businesses and energy groups, who say it will scare off investors and in turn lead to price rises.
The minister insists he has put the pressure all on energy companies, including federal government owned Red Energy, to pass on savings to customers.
Mr Taylor views the closure of coal-fired power stations Hazelwood and Northern as “behaviour which is clearly reducing competition”, despite the facilities closing as they were no longer economically viable to run.
Expressions of interest are open for a new project to fill the void the minister says is left from their closure, but he has not yet said how much taxpayer money will be put towards underwriting such a proposal.
Labor energy spokesman Mark Butler says it’s not too late for the government to resuscitate the National Energy Guarantee, which was designed to save households $550 a year.
“The Morrison government’s plan is to repeat empty slogans and hope the Australian people don’t notice that after more than five years of Abbott-Turnbull-Morrison government, with prices and pollution going up and up, the Liberals still can’t manage to agree on an energy policy,” Mr Butler said.
Meanwhile, a new study says Australia should focus on supplying more gas domestically to help bridge the transition to renewable energy, in terms of cost and emissions.
A United States Studies Centre report released on Wednesday found investors are eyeballing the US over Australia, as local household and business power bills are two-to-three times more.
The amount of coal in the US energy mix has gone down about 40 per cent in the past decade, with more gas than coal now in the equation.
Australia should lift moratoriums on gas exploration, subsidise gas infrastructure expenditure and introduce a formal domestic gas reservation policy, the report suggests.