20 April Energy industry and government response to COVID-19 April 20, 2020 By AMPLA Admin General, Industry 0 In response to the coronavirus (COVID-19) crisis, government and industry have come together to ensure the community, economy and industry are supported. The Council of Australian Governments Energy Council (COAG Energy Council) has formed the Energy Coordination Mechanism (ECM) which is expected to have a complete plan by the end of April. The immediate focus of these efforts has been on four areas 1. Helping consumers To assist consumers and small businesses, retailers have already come together to provide financial relief to those facing hardship. In addition, networks are deferring or rebating electricity and gas network charges. While this is necessary, there is a real risk that smaller retailers may face financial difficulties providing hardship relief. While supporting consumers is paramount, maintaining competition through this period is also important. So small retailers that are finding it difficult to meet their obligations to consumers should speak to their relevant industry organisation for support. 2. Infection control and workforce management Every workplace needs to manage the risk of infection but social distancing laws may directly conflict with staffing and regulatory obligations under a wide variety of frameworks, from Occupational Health and Safety to Environmental regulations. In some situations, there have been clear guidelines and specific exemptions to enable work to continue at plants or mines. For example, Queensland has exempted critical interstate fly-in-fly-out (FIFO) and drive-in-drive-out (DIDO) workers for mineral and energy sites. While this is some relief, organisations still need to meet stringent infection control precautions for these workers while both living and moving to and from work. In other circumstances, some guidance has been issued but it’s not always clear what it means for organisations. For example, Safe Work Australia has told businesses that any regulatory action will be proportionate with a focus on what is reasonably practicable in these exceptional circumstances. This means organisations are in the difficult position of having to pre-empt regulatory responses while waiting for practical guidance. To assist, industry bodies are playing a key role in identifying best practices. For example, NOSEC is currently collecting contingency plans and control measures that are in place as part of the coordination effort. While the Minerals Council of Australia (MCA) has convened a working group to share best practice in mine safety during this time. Documenting each decision and maintaining an open dialogue with industry bodies to access best practices and understand how other organisations are addressing specific issues is critical at this time. 3. Managing supply To manage supply states and territories are collating information on stocks and supply and demand forecasts. As the pandemic may impact major supply chains in the Americas, Asia and Europe this may have a flow-on impact to supply and/or pricing. To help organisations alleviate this some industry bodies are already starting put in place plans and support. For example, the AEMO has a response to the pandemic to ensure that critical operations are protected and able to continue. They’re working with electricity generators, gas facilities, network businesses and other industry participants to support the sector. While the MCA is addressing supply chain shortages by maintaining a list of alternative suppliers available in Australia that you can access. 4. Removing barriers To enable the industry to focus on energy security and reliability, timelines for market design reforms are being extended with regulators developing objectives and criteria for amending rule change dates. For example, implementing the five-minute settlement rule is likely to be delayed. It is expected that more detail will be available on this in coming weeks This is likely to give organisations some relief as they focus on addressing how their business is impacted by the pandemic. While considerable uncertainty still remains over many aspects of the industry, organisations can take some comfort in the fact that government, regulators and industry are working closely together to identify issues and provide clarity where possible. Related Articles Government support for a gas-led COVID-19 recovery Prime Minister Scott Morrison recently announced a gas-led recovery to the economic recession brought on by the COVID-19 pandemic. A key part of the government’s JobMaker plan, the government expects the industry to create over 4,000 jobs. The impact of coronavirus on the energy and resources industry The last few weeks have seen the world face an unprecedented disruption with the novel coronavirus (COVID-19). First reported in China, we’re now seeing many countries shutting down for periods of time to try to contain the spread of the virus. Australia is facing a particularly difficult year given the bushfires that ravaged the country recently. Now with COVID-19 adding to the pain, the energy and resources industry is being impacted in several ways outlined below. Why hydrogen is becoming an important energy source Hydrogen as an energy source continues to grow in popularity. Once confined to industrial processes such as refining crude oil, it is now being recognised as a potential solution to the problems of electricity generation, transportation and storage. Over the next thirty years, global energy demand is predicted to grow by at least 30-40%. At the same time, the share of energy generated from fossil fuels has stayed almost static at 81%. While renewable energy technologies such as solar and wind are getting cheaper, they can only be generated on an intermittent basis. To make them commercially practical to use, they must be combined with high-energy batteries and backed with other energy sources. How foreign investment changes may impact the mining and energy sector In early June 2020, the government announced a review of the foreign investment rules, expanding them to apply to all foreign investors in anything deemed a ‘sensitive national security business’. The changes are scheduled to come into effect on 1 January 2021. There are concerns that this will impact foreign investment in the mining and energy sectors, and in particular the critical minerals space. How your organisation can benefit from government incentives now Eager to support business and protect jobs, governments at all levels have introduced measures and benefits for businesses. While there are many general benefits, like JobKeeper, that have been offered to many businesses, state governments are now offering opportunities to benefit specific industries and sectors including energy and resources. How COVID-19 could change mining for the better The mining industry was deemed an essential service by the Government, which has enabled it to continue to operate during the COVID-19 pandemic. However, this hasn’t been without its challenges. New processes and procedures were required to address safety and social distancing and issues of supply and worker mobility have impacted how the industry operates. But with adversity comes opportunity and the mining industry has thrived and realised the potential for new improvements amidst the pandemic. Showing 0 Comment Comments are closed.