The Australian government has unveiled new measures for reducing electricity and gas prices, which are expected to rise by 20% and 17%, respectively, in July 2017, including restrictions on gas exports, the abolition of limit merits review appeals mechanism and an extra funding for the Australian Energy Regulator. However, these measures will not apply immediately. New gas exports regulations will be implemented and come into effect in January 2018 to prevent future hikes.
In the meanwhile, the government has also commissioned a review by the Australian Energy Market Operator regarding the replacement options of the 3.6 GW Hazelwood coal-fired power plant in the state of Victoria and a closure schedule for the 2 GW Lidell facility in New South Wales, operated by AGL in 2022.
The Australian State Electricity Commission planned to retire Hazelwood by 2005, but it was privatised by the Victorian Government in 1996. The shutdown was planned for 2017 but the government recently approved its life extension until 2030 under the condition for the plant to become more efficient. However, the introduction of carbon taxes could threaten its future operations. In order to compensate this capacity loss, a new coal-fired power plant may be built later on.
More generally, Australia has been undergoing a decarbonation policy since 2015. AGL, the main Australian generation company, announced that it would not build, finance or acquire new conventional coal-fired facilities in Australia and committed to not extending the operating life of any of its existing coal-fired power plants and that all existing coal-fired power plants will be closed by 2050.
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