In an emergency call on Wednesday, the Australian Energy Market Operator informed more than 100 industry operators that Victoria, South Australia and Tasmania face a massive shortfall of gas.
The Australian government will consider calls to introduce price caps on gas and electricity as the nation is hit by the worst energy crisis in 50 years.
Russia’s invasion of Ukraine has choked global oil and gas supplies sending prices soaring but a ‘perfect storm’ of factors are also exacerbating the problem.
Coal fired power plants are operating at lower capacity while renewable energy generation drops to a seasonal low at a time when the east coast is being hit with plummeting temperatures brought on by a weather phenomenon dubbed the ‘polar blast’.
The crisis comes amid warnings vulnerable Australian families could ‘freeze to death’ this winter as the cost of electricity and gas coupled with rising interest rates, fuel and supermarket prices is forcing many to choose between paying rent, putting food on the table and staying warm.
‘If the winter chill is maintained there are going to be significant health implications when people start to struggle to pay their heating bills,’ St Vincent de Paul policy and research manager Gavin Dufty told Daily Mail Australia.
‘We are calling for the government to step in and keep essential energy affordable and to make sure those people are not disconnected during this time.’
Energy industry figures have also pleaded with the newly sworn in Labor government to take ‘unprecedented’ steps to ease the rising costs.
Wholesale power prices soared by a massive 141 per cent in the year to March and the freezing temperatures in Sydney, Melbourne and Canberra this week have triggered a forecast gas spike 50 times normal levels from $10 a gigajoule to $800.
Andrew Richards, chief executive of the Energy Users Association of Australia, called
for price caps and curbs on export to be brought in.
‘It is pretty rough on the incoming federal government, most of which was sworn in yesterday, but we are facing probably the biggest energy crisis in 50 years,’ he told the Sydney Morning Herald.
‘I think [these measures] need to be on the table.’
Treasurer Jim Chalmers was grilled about the issue on morning TV, admitting ‘there is no one measure that can fix this overnight’.
‘There is no use beating around the bush. We have got spiking gas prices, spiking electricity prices and spiking prices for petrol as well,’ he said.
‘So that will put extreme pressure on people and on our national economy.
‘This is a big problem. It is a consequence of a perfect storm of international and domestic factors.’
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