Gas majors seek to avert Australia shortage

"It's a disgrace the way in which your government has treated our state".

In what will be hard to top as the most wild political press conference of the year, federal energy minister Josh Frydenberg and South Australian premier Jay Weatherill threw the gloves on for a 12-round heavyweight fight about power supply on national TV.

The project, to be financed by South Australia's newly-created $150 million Renewable Technology Fund, will seek to have bidders provider a battery that must have a capacity of approximately 100MW and be operational in time for next summer.

"We are facing an energy crisis because of this restriction on gas", Turnbull said at a recent AFR Business Summit in Sydney. Building materials company Brickworks Ltd. said Tuesday it may relocate its manufacturing units outside of Australia after being forced to pay 76 percent more for gas at its east coast operations.

Greens energy and climate spokesperson Adam Bandt and South Australian Senator Sarah Hanson-Young have criticised SA government's $360 million gas-fired power plant announcement.

According to Energy Minister Tom Koutsantonis the grid-scale battery will modernise South Australia's energy grid and begin the transformation to the next generation of renewable energy technologies.

The growing divide between state and federal governments over energy security is worsening angst among Australian companies over rising energy bills.

"The package is a serious response to the state's problems".

The energy market regulator predicts a shortage of gas could lead to widespread power shortages as soon as next year.

'The gas industry is a key part of Australia's prosperity, ' Mr Turnbull said. This comes on the heels of the Government's strategy to bring power prices down and introduce energy stability.

More news: Bill pre-empting local labor initiatives derailed in Senate panel

But the Federal Government says it will actually drive up prices and will investigate if the wider powers to intervene cut across National Electricity Market rules.

Gas producers guarantee that gas will be available to meet peak demand periods in the National Electricity Market (such as during heat waves).

But Mr Frydenberg wasn't having a bar of the criticism, again refusing to make eye contact with Mr Weatherill when he said: "The premier made a $550 million admission of failure a couple of days ago".

But having signed big and lucrative contracts - with correspondingly damaging penalties for failing to meet them - Australia's big gas exporters stand accused of robbing the domestic market to help ensure they meet their global obligations.

The impact on prices would be extremely important to the scheme's implementation, it said.

"APGA is also concerned that the Government has announced that gas market reforms, which the pipeline industry supports, are to be further accelerated".

How do you convince the states to open up exploration to create more supply?

After the state-wide blackout last September, Mr Frydenberg led the COAG Energy Council to appoint Australia's Chief Scientist Alan Finkel to deliver a blueprint by mid-2017 to fix the security of the NEM.

"A broad range of technologies and solutions from local and worldwide businesses are now competing to meet this demand". Gas producers' facilities tend to be at great distances from gas-fired power stations.

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