New South Wales will require thermal coalminers reserve as much as 10% of their output for domestic coal-fired power stations and other users in a bid to share the burden more fairly among producers.
The move, announced on Thursday, is the latest government intervention in energy markets in a bid to limit price increases and avoid a repeat of last June’s supply shortages that helped trigger a suspension of the national electricity market.
In December, the Albanese government imposed one-year price caps on gas and black coal in an attempt to lower electricity prices. Big energy users said this week that the gas industry was still behaving like “a bunch of bullies”.
The NSW energy minister and treasurer, Matt Kean, is aiming to introduce the new requirements for miners to set aside about 7% to 10% of their production for the local market after further consultations with the industry.
“This coal cap scheme will see NSW doing our part at the request of the Albanese government to contribute to the national solution of this national problem,” Kean said in a statement.
“I know those currently providing coal for the local market will appreciate that companies enjoying super profits on the back of the war in Ukraine will now do their part for the domestic market. Of course they should provide Australian production for Australian consumers.
“These new arrangements will help even the playing field among coal producers.”
The NSW Minerals Council was approached for comment.
Under the federal government’s plans, agreed to by the NSW government, black coal prices for domestic use are capped at $125/tonne. Compensation for power stations that burn coal above that price, paid for by the commonwealth, may reach hundreds of millions of dollars. Gas prices are capped at $12/gigajoule.
More to come.