Broad energy measures proposed to lower power prices

Cabinet this week will discuss a proposal to intervene in the energy market and bring down power prices, with the canvassed set of measures to be broader than a hit on gas producers.

A major coalminer has warned the government against a heavy-handed approach to dealing with surging energy prices. Picture: Ian Waldie/Bloomberg

Cabinet this week will discuss a proposal to intervene in the energy market and bring down power prices, with the canvassed set of measures to be broader than a hit on gas producers.

The Australian understands a deal has been struck to intervene in the sector between Treasurer Jim Chalmers, Energy Minister Chris Bowen, Resources Minister Madeleine King and Industry Minister Ed Husic.

The proposal will be put to the cabinet meeting on Monday or Tuesday, according to sources, in line with the government’s pledge to unveil the policy by Christmas. It is unlikely to include a super profits tax on the resources sector, but will be more interventionist than what the sector and pro-resources MPs have been pushing for.

The Albanese government is under pressure to deliver a package of measures to tame runaway electricity and gas prices, which the October budget estimated would surge by as much as 56 per cent over the coming two years.

The Australian understands the suite of measures will be broader than increasing regulations on the LNG producers, with NSW and Queensland pushing for any regulatory changes to include the coal sector.

The Australia Pacific LNG facility on Curtis Island.

On Sunday, Prime Minister Anthony Albanese said the ­government would progress discussions on market intervention this week. “We’ve said that our timetable is to make decisions this year, prior to Christmas, and that remains the timetable,” he said.

Major coalminer Yancoal has warned the government against a heavy-handed approach to dealing with surging energy prices, saying “shortsighted and reactionary policies” would damage the national interest.

In a statement, the miner, which employs 4500 people across its operations in NSW, Queensland and Western Australia, said it had contributed more than $3bn to federal and state tax coffers over the past six years.

“New taxes or regulations on coal exports is ill-informed and damaging, not just to coal companies, but also to Australia,” the statement from the ASX and Hong Kong-listed company said.

Resources Minister Madeleine King said Australia was “feeling the impact of the global energy crunch, extreme weather events and 10 years of energy policy chaos by the Liberal government”. “While these challenges won’t go away overnight, the Albanese government is wasting no time delivering a stable policy framework to reduce volatility in the market, put downward pressure on prices, encourage increased investment in transmission and firmed renewables, and to keep the lights on,” she said.

Dr Chalmers last week told manufacturers and business leaders that his “preference” was for temporary and targeted regulatory interventions – suggesting price caps, potentially at the retail level, were more likely than additional levies on producers of coal and gas.

New fossil fuel projects are facing increasingly high approval hurdles. The Queensland Land Court on Friday rejected billionaire Clive Palmer’s application to develop a new coalmine in the state’s Galilee Basin, after the court accepted environmentalists’ argument that it risked exacer­bating global warming.