Peter Dutton plans to include gas in the CIS if Coalition wins the election

Peter Dutton’s election commitment to include gas in the CIS has been hailed by the industry and some experts as ‘sensible’ but lashed by Labor and the Greens.

The Coalition’s Ted O’Brien says the CIS would be expanded to include new gas auctions if Peter Dutton were to be elected.

Peter Dutton’s election commitment to include gas in the ­Capacity Investment Scheme has been hailed by the industry and some experts as “sensible” but lashed by Labor and the Greens, with Climate Change and Energy Minister Chris Bowen questioning why the ­Coalition would support new gas when it was “so much more expensive than ­renewables”.

Opposition climate change and energy spokesman Ted O’Brien on Tuesday announced that a Dutton government would add annual auctions for new and existing gas capacity in the CIS – which has invested solely in renewables and battery storage under Labor – with the amount and timing of capacity to be called for still to be determined.

In a bid to bring on more supply and send a message to industry and trading partners that the Coalition “backs gas”, Mr O’Brien said it would help stabilise the gas and electricity markets while setting renewables up for success.

“The message I am here to convey today is that gas is here to stay,” Mr O’Brien told the Australian Pipelines and Gas Association Convention.

“These contracts will include bidding obligations to ensure the reduced commercial risk of participating in the CIS is passed on to consumers in the form of lower electricity prices. There will also be availability obligations for gas generators which, if not met, will attract penalties.”

Mr Bowen said Mr O’Brien had two questions to answer: “One: why is he proposing to provide windfall gains to existing gas producers, who are already operating? Two: why would any new gas get support in the CIS when it is so much more expensive than renewables?

“Gas been included in the NSW auction scheme for years but never won a single auction,” Mr Bowen’s spokeswoman said.

“The Albanese government’s CIS is squarely focused on bringing forward investment in renewables and storage because that’s what we need to ensure a reliable and affordable grid. Meanwhile, the Coalition has a plan to increase bills, stop renewable investment, and lock Australia into more dangerous climate change.”

Some industry experts said the inclusion of gas was a necessity amid a deep concern about the transition to renewables and what would provide a backstop.

“Including gas in the CIS is sensible. Right now, gas is probably the only thing that can provide the capacity for long periods of time,” Tony Wood, Grattan Institute energy program director, said.

The Albanese government has set a target of having renewables generate 82 per cent of the country’s electricity by 2030, but the industry is increasingly alarmed about what will power the grid during periods of so-called renewable energy droughts.

The APGA said including gas in the CIS was “sensible policy” and had been embraced by the South Australian Labor government through legislation before the state’s parliament.

“The future of Australia’s predominantly renewable electricity system will need gas-fired generation to ensure it remains reliable, affordable and low emissions for all households and businesses,” APGA chief executive Steve ­Davies said.

“If we want to gas generation to be there when it’s desperately required, as it was during this past winter in the southern states, we need to ensure the capacity is available so it can play this vitally important role.”

Greens leader Adam Bandt questioned why both the major parties wanted more gas when it was “as dirty as coal”.

“In any power-sharing parliament, the Greens won’t back the Coalition and will push Labor to stop opening new coal and gas mines,” he said.

The Australian Energy Market Operator has forecast Australia will need 13GW of new gas-powered generation in the next 25 years to maintain reliability in the National Electricity Market as more wind and solar comes online.