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Energy industry and government response to COVID-19

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.

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