NSW Treasurer hopes to even the playing field with coal scheme

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“The NSW energy minister’s coal price cap is a clumsy, politically motivated market intervention designed in haste, with little or no consultation,” Galilee said.

“Extending the policy to coal producers not currently involved in domestic coal supply is a radical change of approach that highlights how extremely rushed this policy process has been.

“The price cap policy undermines the reputation of NSW as an investment destination, and as a trading partner and supplier to our critical export markets overseas. It will threaten future investment in NSW across the resources and energy sector, and more broadly.”

In NSW, there were already coal reservation arrangements in place under which some producers would be required to carve out a large portion of their supply for domestic electricity generation while others were exempt. These are expected to be applied in April.

But under Thursday’s announcement, most coal producers in NSW will be required to earmark about 7 to 10 per cent of their coal for domestic electricity generation. The state government is consulting relevant companies with the new orders expected to come into force at the end of January.

“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,” Kean said. “These new arrangements will help even the playing field among coal producers.”

The new reservation orders follow days of back and forth on the price cap on gas, with gas producers found to be suspending new contracts with retailers until they have more detail about how the price cap works.

With AAP

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