Australia eyes more "productive" use of energy resources: white paper

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Australians should pay more for electricity in peak times, according to the energy white paper released on Wednesday by the Australian government, which outlined it wants more "productive" use of energy resources.

The report suggested temporary visas for immigrant workers be more flexible, reaffirmed Australia's commitment to reduce the renewable energy target and called on a moratorium on coal gas seam projects in some parts of Australia to be lifted.

The minister for industry and science, Senator Ian Macfarlane, said the report would provide the blueprint to lower costs, improve energy use and stimulate economic growth.

"Our guiding principle is that markets should be left to operate freely, without unnecessary government intervention," said Macfarlane in a statement.

"The National Energy Productivity Plan will deliver up to 40 percent improvement in energy productivity, reducing household and business energy costs, encouraging economic growth, as well as helping to reduce emissions."

"We export around 80 percent of our energy production and these exports totaled 71.5 billion AUD (55.77 billion US dollars) in 2013-14 and provided jobs for around 170,000 people," Macfarlane said.

The paper addressed the moratorium on coal seam gas, also known as fracking, enforced by the state governments in New South Wales and Victoria by saying the projects would provide "much-needed" boost for the under-supplied gas market.

"We will be taking an integrated approach to address challenges arising in the gas market as a result of our domestic markets linking in with international markets," said Macfarlane.

"This includes removing unnecessary barriers to increasing supply, ensuring adequate competition and transparency in the upstream gas market and encouraging more flexible trading arrangements through trading hubs."

The paper has urged more competition to lower energy prices which have risen starkly in recent years.

Despite electricity demand falling in Australia, peak usage has increased as more people buy energy-hungry devices like air- conditioners.

The paper said as delivering power costs electricity companies more per unit in peak times, tariffs should vary at different times of the day to better reflect the infrastructure cost of delivering power.

The wholesale cost of electricity has increase by around 50 percent as companies tried to cope with peak supply by investing in new poles and wires.

The paper called for the privatization of electricity assets with the argument that competition can "improve consumer choice and put downward pressure on prices".

Macfarlane said the paper will provide a framework for coherent and consistent energy policy that will enable the integration of other related policies as they are developed.

"For example, given Australia's energy sector contributes a large proportion of our greenhouse gas emissions, Australia's emissions reduction target after 2020 will link closely with energy related reductions," he said.

The response from climate groups was harsh with the Climate Institute's chief labeling it "deeply flawed".

"This Energy White Paper envisages an Australia clinging on to its old, dumb and dirty energy sector rather than driving a switch to modern, smart and clean energy," said CEO John Connor in a statement.

"There's an extraordinary gap between the government's rhetoric on improving investment in energy and willfully ignoring the biggest deterrent to investment uncertainty about Australia's long-term plan to decarbonise. The vision and recommendations of this white paper remain mostly a fantasy of climate ignorance," he said. Endi

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