Energy Users Association of Australia says cost-of-living pressures will be exacerbated

The Allan government has been accused of a “massive policy failure” amid a new warning that jobs will be lost and households and businesses face higher energy costs.

Victorian households and businesses are facing higher energy costs and job losses if gas supply woes are not urgently fixed, industry warns.

The message to government comes after a new report found the state is running out of gas faster than initially forecast, with shortfalls predicted over the next four years.

The Allan government has played down the concerns, despite conceding that there would be a continued role for gas, saying Victoria had time between now and 2028 to ­secure cheaper and cleaner ­energy.

But Energy Users Association of Australia CEO ­Andrew Richards said cost-of-living pressures would be exacerbated by higher prices if supply can’t keep up with demand, because businesses will struggle to compete with imports.

Gas shortfalls are predicted over the next four years.

“Once again the independent market operator has highlighted the need to develop new gas supplies in order to keep families warm in winter, to ensure manufacturers can continue to make the many things we take for granted like food, building materials, steel and glass and to play a key role in the transition to a low-emissions energy sector,” Mr Richards said.

He warned that planning laws were delaying critical ­energy projects, and urged the Allan government not to “penalise people who need to stay on gas”.

AI Group energy director Tennant Reed said LNG ­import terminals could help address gas supply issues but it would not come cheap.

Mr Reed said a plan was also needed to spread the cost of the retiring network because the “death spiral” meant those who continued using it faced high prices.

The independent market operator has highlighted the need to develop new gas supplies. Picture: Brenton Edwards

Victorian Energy Minister Lily D’Ambrosio accused gas companies of being focused on profits from exports and not domestic supply.

She said the forecast gas shortage underscored the government’s push for homes and businesses to electrify, adding it would “free up the limited supply” for those that couldn’t switch.

But Australian Energy Producers Chief Executive Samantha McCulloch said there was a massive policy failure when diesel, a higher emitting and more expensive fuel, may be needed for electricity because “governments have stifled new gas projects with approval delays and compounding interventions”.

Australian Pipeline and Gas Association CEO Steve Davies said: “If we don’t solve this structural supply issue fast, the consequences will be lower economic output, higher energy costs for households and industry, and ultimately, the loss of Australian jobs”.

“Governments must act to de-risk gas investments, which are essential if we are to close coal power stations and support intermittent renewables during the energy transition,” he said.

Environment Victoria spokeswoman Joy Toose said the latest report highlighted the costs of delaying household electrification.

Originally published as Energy Users Association of Australia says cost-of-living pressures will be exacerbated