Global energy wobbles power-up electrification push
Australia's exposure to energy price shocks is back in the spotlight, with even the weekly grocery shop in the firing line if tensions in the Middle East escalate.
A ceasefire agreement has global oil prices simmering back down from highs of $79 a barrel after the US bombed Iranian nuclear facilities but the threat of revived tensions remains.
For clean energy and electrification advocates, the latest round of geopolitics-fuelled price volatility serves as an urgent reminder to hasten the transition.
Daniel Bleakley, co-founder of a zero-emissions heavy road freight company New Energy Transport, argues Australia's food supply chains are particularly vulnerable to oil price shocks.
Produce is carted over vast distances in heavy trucks, with diesel making up a sizeable chunk of total operating costs for these transport companies.
Heavy trucking firms insulate themselves from oil shocks by inserting diesel surcharges into long-term contracts with supermarkets and other transport customers.
"What that means is Australia's food distribution system is highly dependent on the price of diesel, and the price of diesel is obviously highly dependent on the global oil price," Mr Bleakley told AAP.
Motorists are also vulnerable to oil spikes and federal Treasurer Jim Chalmers has already written to the consumer watchdog to ask it to monitor price-gouging at the fuel pump during the latest round of turmoil.
Institute for Energy Economics and Financial Analysis analysts Amandine Denis-Ryan and Kevin Morrison said electric cars could protect motorists from oil price spikes but take-up had been slow.
Electric vehicles accounted for a record high of 10 per cent of Australian sales in 2024, still falling well short of the 20 per cent of new purchases globally.
Households could insulate themselves from gas price spikes by investing in efficient electric heaters and stoves.
"Shifting to efficient electric alternatives would save households over $3.4 billion in unnecessary energy costs over the life of those appliances," the institute analysts wrote in a note.
Victoria is moving away from gas appliances, phasing out hot water units and ensuring new builds are all-electric by 2027.
Inner-city Sydney is going the same way, with the city council this week announcing a ban on indoor gas appliances in new developments.
Hurrying along the broader shift to renewables would also leave wholesale electricity prices less exposed to gas and coal prices.
"In these turbulent times, it is time for Australia to look more seriously at how it can improve its energy security and better insulate itself from global energy shocks," Ms Denis-Ryan and Mr Morrison said
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