BRISBANE, AAP – Australians are “lucky bastards” to be avoiding the gas price crunch in Europe, according to the former British energy regulator.
Dermot Nolan, ex-CEO of the UK Office of Gas and Electricity Markets (OFGEM), said on Friday the soaring gas price in the United Kingdom was now beyond the control of regulators and companies.
Even before the war in Ukraine, UK gas prices were up more than 50 per cent and were now projected to rise another 60-70 per cent over the next six months, he told the Energy Networks conference in Brisbane.
Most British homes are still heated by gas, leaving the population vulnerable to price spikes, while Australians enjoy the power bill buffer of world-leading rooftop solar and more renewable energy in the electricity grid.
“You are, pardon my language, lucky bastards for not having that level of increase in terms of your gas prices,” Mr Nolan said.
“I’m very glad I’m not head of OFGEM anymore.”
He said some are saying forget about net-zero emissions by 2050, while others are saying the problem is the dependence on gas and there needs to be more power generated from offshore wind.
“At the moment you have a very confused and difficult, and above all political, set of conditions in Britain, with companies and regulators trying to keep their head down,” Mr Nolan said.
“My main wish to Australia is that you don’t have to go through this.”
He said the UK had enshrined its net-zero commitments in law, unlike Australia, and there were still some niggles about the transition to a carbon neutral economy perhaps pushing power prices up.
“The rise in fossil fuel prices has sent retail prices in the UK skyward, but this does not seem to have crystallised opposition to decarbonisation,” he said.
Mr Nolan acknowledged the political contest still underway in Australia and fears about renewable energy “putting the lights out”, but said decarbonisation was inevitable.
Federal Energy Minister Angus Taylor warned against complacency on gas prices here.
Gas supply pressures across Europe are a result of underinvestment in oil and gas in recent years, he told the conference.
“This is something we have continued to raise on a global level with the International Energy Agency – but it is also a risk here at home,” he said.
“Fortunately, our gas prices have remained up to 80 per cent below those seen in Europe.”
Mr Taylor called out what he described as “activism” against new sources of gas.
Stopping large basin developments and discouraging new residential gas connections could cause both electricity and gas prices to rise, he warned.
Australia’s green bank, the federal Clean Energy Finance Corporation, has announced a $10 billion milestone in investment, which it said would accelerate the transition to net-zero emissions by 2050.
Labor spokesman Chris Bowen reiterated the opposition’s “rewiring the nation” policy to connect an abundance of solar and wind to the electricity grid.
He said he welcomed the “policy adventurism” of Liberal and Labor state governments trying to respond to climate change and roll out an energy transition with no national plan.
If Labor wins on polling day in May, he said he would quickly meet with energy and climate change ministers to talk about “how we can start rowing in the same direction”.