THE Albanese government's proposed domestic thermal coal price cap will not work and may actually increase prices, a new report commissioned by the Minerals Council of NSW says.
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The research paper - A practical approach to easing electricity prices in NSW - was written by Matthew Warren and Kieran Donoghue from the power sector consultancy Boardroom Energy.
Mr Warren is a former CEO of the Clean Energy Council, the Australian Energy Council and the Energy Supply Association of Australia.
Mr Donoghue has worked in the UK, NZ and Australian energy sectors as a regulator, industry advocate and consultant.
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Unveiling the 15-page paper, Minerals Council CEO Stephen Galilee said the report highlighted what he called "significant flaws in Chris Bowen's call for the states to impose price caps on coal, calling the measure 'impractical' and 'unlikely to materially impact wholesale electricity prices'.
Mr Galilee said the report found a price cap "risks exacerbating electricity price increases".
He said the report had found that even if a price cap worked, it would be unlikely to have any impact on household power bills for at least a year, if not longer.
Mr Galilee said the report indicated that high power prices were caused by a shortage of electricity supply and warns of a bleak winter next year due to a looming spike in global gas prices, delays in the deployment of renewable energy, and planned early coal plant closures.
He said the paper called on governments to ensure more generation supply was available, including potentially delaying closures of the Liddell and Eraring coal power plants in NSW until enough renewable generation is ready to replace them.
Mr Galilee said the report had been commissioned to inform the national public and political debate about energy costs.
"Like other industries, the mining sector is an energy user and extremely concerned about high energy costs, and we want workable solutions that will actually address the problem, "Mr Galilee said.
"We also want a properly managed transition that delivers the reliable, affordable low emissions energy we have all been promised.
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"However a price cap on coal is a short term political fix, not the solution it is being portrayed as, and it may actually make things worse.
"Any plan that fails to address the coming electricity supply crunch is doomed to failure, and holds out false hope that energy prices will fall. It also puts public support for the energy transition itself at risk."
MORE INFORMATION FROM THE BOARDROOM ENERGY REPORT TO COME
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Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
