|
Hey Reader, in today's edition:
- Gas reservation scheme confirmed
- Energy plans getting more complex
- Regulator takes Origin Energy to court
|
|
|
|
Burning more of our gas here
A domestic gas reservation scheme requiring exporters to reserve up to 25% of gas production for the local market will be co-designed with industry next year.
The federal government, while failing to land a deal in 2025, wants a regime where exporters need to meet domestic supply obligations before exports are approved and also promises it won’t damage the energy security of longstanding trading partners in Asia.
The reservation scheme is intended to reduce gas prices and support investment decisions by smelters and refineries that would otherwise close.
“Our government is supporting heavy industry to decarbonise as much as possible, but not every facility can and some use gas as an irreplaceable feedstock,” Industry Minister Tim Ayres told reporters in Canberra. “This is one of the reasons we will introduce a domestic gas reservation scheme.”
The reservation will have the capacity to be national in scope, working in tandem with Western Australia’s mechanisms, and is intended to commence in 2027.
Other key recommendations in the Review Report include phasing out the Gas Market Code’s $12/GJ reasonable price provisions and new principle-based requirements for selling practices, including reserved gas.
“Gas has an important role to play in our energy system as we transition towards 82% renewables. Unlike coal, gas power generators can be turned on and off in a couple of minutes – providing the ultimate backstop in our energy grid,” according to Climate Change and Energy Minister Chris Bowen.
Principles guiding the “detailed design” phase slated for next year include respecting existing contracts. Any contracts signed after Monday’s announcement will be fair game.
The Australian Council of Social Service (ACOSS) welcomed the announcement and called on the federal government to also introduce a gas export levy of 25% to ensure gas giants contribute their fair share of profits from public resources.
“But we warn against future initiatives to incentivise more gas production or subsidise rich multinational companies through the government bulk buying gas for manufacturers. Given the domestic gas reserve won’t start until 2027, we are also urging the government to do more to immediately help people struggling the most with energy bills.”
ACOSS Program Director of Climate and Energy Kellie Caught
|
Expert view
"The intent is for Australian demand to be prioritised over exports and supplied at affordable prices. This simple principle is worthy of support. Implementation raises some big issues: can a set proportion ever be just right, what happens with over-supply, what is an efficient price, and will the review address emerging south-east shortfalls? Ideally the announcements can create enough goodwill from sellers and buyers for all these questions to be satisfied."
|
Tony Wood
Senior Fellow, Energy & Climate Change, Grattan Institute
|
|
Expert view
“Because of a series of weak decisions by Australian governments during the late 2000s and early 2010s, foreign gas giants operating here were gifted the sweetest deal out of anywhere in the world. They've been able to pump our gas out of the ground and flog it to the highest foreign bidder without restriction. It's high time for a fairer deal, and that's what this government is delivering.
Crucially, the government has opted for an export permit system that requires exporters to meet domestic supply obligations before exports are approved. Obviously there is detail that still needs to be shored up and the AWU will continue to work closely with decision makers as the consultation process progresses. We need to know, for example, that appropriate measures will be put in place to guarantee that gas will be available to industry from day one of the scheme.”
|
Paul Farrow
National Secretary, Australian Workers' Union
|
|
Energy plans getting more complex: ACCC
A push by consumer advocates to see energy plans simplified has been given support by the competition regulator, with its latest inquiry into the National Electricity Market finding customers are increasingly on electricity plans with complex pricing structures that seek to encourage them to reduce their usage at peak times.
Customers also face complexity from the number and variety of plans in the market and confusing plan naming practices, the ACCC said, in its 14th report looking into competition and prices in the NEM.
It found the loyalty tax continues, with households that have been on the same electricity plan for more than three years paying on average $221 per year more than customers on new plans. But a higher proportion of customers are now on their retailer’s best offer — 26.7% of residential customers, up from 19.3% in 2024.
The regulator expects upcoming reforms to make a difference, including changes to better offer messages, the extension of Default Market Offer protections to other plan types and the rule maker’s pricing review.
“Given that savings are only available to those who change plans, we encourage policy makers to continue to focus on reducing barriers to switching and protecting customers who don’t regularly switch plans.”
ACCC Commissioner Anna Brakey
Meanwhile, annual retail electricity prices increased for most residential customers in 2025, the report found. Residential plans in NSW had the biggest calculated annual price increases, up by 8.8%
Retailer peak body the Australian Energy Council said the report showed competition was working for customers, pointing to the share of customers on new plans rising from 29 to 42%.
The report also found retail market concentration decreased slightly in 2025 across the NEM, and in NSW fell below the threshold of ‘highly concentrated’ for the first time in the more than 7 years the ACCC has been reviewing the market.
|
Welfare recipients allegedly stung by Origin Energy
Origin Energy (ASX: ORG) is the latest gas and electricity major in the dock after allegedly overcharging customers who could least afford it and had already paid off their energy debts.
The Australian Energy Regulator (AER) instituted proceedings in the Federal Court against four Origin subsidiaries for allegedly receiving more than $2.5 million — via more than 77,000 deductions from social security benefits through a federal government billing service — between December 2019 and March 2025.
Origin allegedly failed to inform the Centrepay customers about the overcharged gas and electricity payments or refund them promptly, with investigators claiming one customer was overcharged by more than $11,000 over a period of almost 2 years.
“Many customers affected by this alleged conduct were likely experiencing economic vulnerability and could have otherwise used the money they were overcharged to spend on essentials.”
AER Chair Clare Savage
The filing of court proceedings on Monday was prompted by a referral from Services Australia. A separate AER investigation from the same referral resulted in Alinta Energy last month paying $1,089,000 in penalties.
In December 2024, the Federal Court imposed a $25 million penalty on AGL for failing to comply with overcharging obligations related to Centrepay payments. AGL appealed and the decision is pending.
|
|
|
|
Capital
|
Iberdrola, which plans to invest €1 billion in Australia by 2028, acquired the 242MW Ararat Wind Farm in Victoria from Partners Group and OPTrust. The asset sells most of its output through Power Purchase Agreements (PPAs) with large customers, providing predictable cash flows in a state targeting 95% renewable energy by 2035. The wind farm is also set to benefit from upcoming infrastructure projects, such as the Western Renewable Link and Project Energy Connect, increasing its options to export energy.
 Projects
|
Flow Power has received the green light from its financial backers and will commence construction early next year on its proposed 100MW/223MWh battery energy storage system (BESS) in Victoria’s Latrobe Valley.
Policy
|
The “unstoppable” surge in clean energy was named breakthrough of the year as renewables surpassed coal as a source of electricity worldwide, with China dominating the global supply chain for renewable energy technologies. The energy superpower makes 80% of the world’s solar cells, 70% of its wind turbines, and 70% of its lithium batteries, at prices no competitor can match. (Science)
TEPCO, the operator of the Fukushima nuclear power plant damaged in the 2011 Japanese earthquake and tsunami, will restart its first nuclear power plant since they were all shut down in the wake of the disaster. Nearly half the nuclear power plants in the country have been ungraded and restarted since the disaster, but the Kashiwazaki-Kariwa plant is the first TEPCO-operated plant to restart, with protesters raising objections about TEPCO's safety record. (Reuters)
The US Government has "paused" all off-shore wind projects in the US, citing national security concerns. Amongst the five wind projects affected, one was approved only five days ago. (Heatmap News) (Recharge) (Utility Drive)
Technology
|
The world’s second carbon dome battery is scheduled for completion in India next year, following a successful commissioning in Italy of the first. The technology involves a compressor powered by renewable energy that condenses carbon dioxide in a closed circuit. When conditions are unfavourable for wind and solar, the system runs backwards, generating energy, while the gaseous carbon dioxide is prevented from escaping with a giant bubble-like membrane. (IEEE Spectrum)
People
|
AgriFutures Australia appointed Mick Veitch as its new Chair, replacing Cathy McGowan.
Climate
|
The Climate Council wrapped 2025 with hopeful climate stories from Australia, and the world, including the biggest annual drop in climate pollution outside the COVID era driven by a surge in renewable energy displacing coal and gas.
Research
|
Researchers at Germany’s Fraunhofer Institute for Applied Polymer Research, together with the BBF Group, have figured out how to produce wind power in very light winds. (TheDiary24)
|
|
|
|
What's On
The Energy will be taking a break from our daily schedule from December 25 through to January 12, but we'll be bringing you some helpful and inspiring insights from our expert network during that time. Thanks for your support in 2025 and wishing you a safe and restful holiday season.
|
|
|
|