Submit your feedback: Published response
Published name
Should the ADGSM:
Describe your suggested alternative mechanism or policy in less than 150 words.
Please see submission attached. We consider any extension to the ADGSM should be limited to 2025 (at least initially).
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19 July 2022
The Hon Madeleine King MP
Minister for Resources and Northern Australia
Parliament House
Canberra ACT 2600
Submitted online: https://consult.industry.gov.au/adgsm-extension
Dear Minister
Extending the Australian Domestic Gas Security Mechanism to 2030
Origin Energy Limited (Origin) welcomes the opportunity to provide comments on the Commonwealth
Government’s proposal to extend the Australian Domestic Gas Security Mechanism (ADGSM) to 2030.
Origin recognises the Government’s rationale for seeking to extend the ADGSM’s sunset date prior to commencing a broader review, noting the mechanism would otherwise be repealed on 1 January 2023.
However, a lengthy extension out to 2030 is not ideal, particularly in the absence of further clarity around the future design of the scheme.
Instead, we suggest limiting any extension (at least initially) to around 2025. This would provide an opportunity to consider the outcomes of any review process, while also allowing for an updated view of prevailing / forecast market conditions. Such an approach would not preclude any future extension of the mechanism beyond 2025 – if deemed to be warranted.
Recent volatility across energy markets has understandably brought into focus the suitability / capability of policy instruments to help manage such events. While we expect any review of the mechanism to delve into these issues in greater detail, recent market dynamics have been driven by a combination of factors. It is our understanding that the observed uplift in gas demand and spot prices have been primarily driven by a series of plant outages and coal supply constraints in the electricity market that led to greater reliance on gas fired generation. This occurred at a time when broader geopolitical issues were already putting upward pressure on fuel prices and the onset of cooler weather was driving increased domestic demand. It is unlikely the ADGSM could practically be designed to address such a broad range of factors that extend well beyond the domestic gas market.
If you wish to discuss any aspect of this submission further, please contact Shaun Cole at shaun.cole@originenergy.com.au or on 03 8665 7366.
Yours Sincerely,
Steve Reid
Group Manager, Regulatory Policy
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