This paper is intended to reframe the foundations of energy policy in Australia, to stimulate debate, and to guide future research (including, but not only, that under-taken by the IPA). It will describe the nature and importance of energy security and explain why it must be the pre-eminent consideration for energy and related policies, not least because energy security is national security.
Australia has been at an impasse in energy policy-making for some time, and this is having real-world negative effects. The National Electricity Market (NEM), which covers all states except Western Australia, was suspended in the middle of 2022. The east coast gas market was effectively nationalised when the Federal Government imposed price controls and mechanisms to direct supplies. Meanwhile, costs to consumers continue to rise, and the market operators report increased risk of blackouts.
The Federal Government has an official plan for the NEM, in the shape of the Integrated System Plan (ISP), but its unrealistic assumptions and deficiencies are becoming more apparent by the day. While existing baseload capacity is being shut down, the promised pipeline of investment in renewables, and the massive expan-sion of the physical grid that it promised, is not occurring – because it can’t.
We have also seen the flow-on effect of this on our geopolitical position and international reputation, with the lack of a commitment to supplying our friends and allies with the energy they need resulting in unprecedented outcomes, like public expressions of concern by the Japanese Prime Minister and Japanese energy customers. And, in a more roundabout way, the willingness of countries like India to continue relying on Russian oil and gas at a time when the latter country is sup-posedly an international pariah.