Anthony Albanese warned to power up on energy

The failure of a major coal-fired unit at AGL’s Liddell Power Station has exacerbated pressure on the national power grid as Anthony Albanese eyes a short-term response to the energy crisis.

The Liddell Power Station.

The failure of a major coal-fired unit at AGL’s Liddell Power Station has exacerbated pressure on the national power grid as Anthony Albanese eyes a short-term response to the energy crisis which could be announced as early as next week.

Unions, industry groups and manufacturers have warned that businesses and jobs are at risk from gas and power shortages created by cold weather and coal generation outages.

Two of the country’s biggest industrial energy users – the Tomago aluminium smelter in NSW and Alcoa’s Portland smelter in Victoria – were forced to curtail production to take pressure off the grid.

The Weekend Australian ­understands that while energy supply is guaranteed over the next week, electricity shortages and spot prices will likely worsen in coming months and put pressure on energy-intensive manufacturers as they move off long-term contracts.

AWU national secretary ­Daniel Walton, who is in close contact with Labor ministers, ­demanded the government “pull the trigger today” and force gas exporters to divert more resources to domestic users. “There is zero time for hesitation, this is the easy part of the crisis right now. Things are about to get a lot worse without action,” Mr Walton said.

“The government needs to pull the trigger today. Yes, it won’t come into ­effect until January, but obviously manufacturers hanging in there by the skin of their teeth will be able to tell investors some relief is on the way.

“The government then needs to start urgently pursuing changes to the Australian domestic gas security mechanism so that it controls price and not just supply.”

Energy Minister Chris Bowen and Resources Minister Madeleine King are receiving daily briefings from peak energy regulators and speaking with resources companies ahead of a crunch meeting between the nation’s ­energy ministers on either Tuesday or Wednesday.

With electricity prices surging and gas supply under pressure, short-term options to lock in domestic reserves and increase coal production are expected to be finalised by the end of next week.

The government is also assessing medium to longer-term plans to shield the nation from future global shocks. As reported by The Australian, it is considering a scheme to reserve gas for use by east-coast consumers and intervening to unlock more supply and alleviate pressure on consumers. The Prime Minister said the government was “talking through with the sector how we can alleviate the immediate real pressure … on businesses and households”.

EnergyQuest data released on Friday showed high gas demand on the east coast was sparked by failures across other parts of the national electricity market (NEM), particularly coal.

“I see this as more an electricity crisis than a gas crisis. Electricity demand has increased but coal generation has fallen due to coal outages and closures and problems with coal supply in NSW,” EnergyQuest chief executive Graeme Bethune said. “Renewables have only been able to ­partially fill the gap so gas use has jumped … There has not been any big change in LNG exports.”

Deputy Prime Minister Richard Marles said the government would leave “no stone unturned” in its immediate response, including ramping up coal-fired power.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar blamed the gas price surge on domestic and international factors and a ­“failure to reach bipartisan consensus on energy and emissions reduction policy”.

Australian Industry Group chief executive Innes Willox said forward-looking gas reservation and new projects would not help the immediate crisis.