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 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 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. COVID-19 AMPLA Update From the Chair and Executive Director Further to our update last week, AMPLA is pleased to confirm the following arrangements are now in place to support our staff and members in the coming months: Dealing with market volatility in the oil and gas industry The oil and gas industry is experiencing unprecedented volatility since prices slumped in March following the collapse of the OPEC+ supply pact. In the past week alone oil prices have reached historical lows with West Texas crude reaching approximately -US$40 a barrel in future trades. Volatility has been driven by reduced output from Russia quickly followed by lockdowns associated with the COVID-19 pandemic. This is impacting economic growth across the world, with the OECD already lowering its global economic growth estimate for 2020 from 2.9% to 2.4%. The longer the outbreak continues, the greater the decline in global growth and the corresponding fall in demand for energy. What law firms and in-house legal are doing to combat the threat of coronavirus The novel coronavirus (COVID-19) is drastically changing how we live, work and even play. For law firms and in-house legal practitioners, that means balancing the concerns of your clients with safeguarding your own staff. In some ways, small firms have an advantage over their larger counterparts. Moving to remote or online work is simpler with fewer moving parts to accommodate. On the other hand, it can be challenging to meet the increased needs of your clients at this anxious time. For in-house legal services, the size of the challenge becomes one of risk management for their organisation. But even those with strong governance and business continuity plans in place are struggling to manage many of the unprecedented issues they’re facing today. Showing 0 Comment Comments are closed.