Renewable energy
Wind mills are seen at the Tazigou wind power station in Fuxin, Liaoning province November 22, 2009. Reuters/Stringer

Australia is slowly exhausting its power supply with prices forecast to climb higher, the energy industry has said. This comes in the midst of a study released on Thursday that renewable energy was Australia’s cheapest alternative, keeping into account the cost of storage to make intermittent power sources reliable.

Tackling the crisis will require gas and electricity prices to be covered by one national policy, according to the Australian Energy Market Operator. To accommodate this, the Australian Energy Council has suggested that states wind back their renewable energy targets. Prime Minister Malcolm Turnbull will be meeting with gas company bosses to discuss ways to handle the crisis.

The energy regulator has said New South Wales and South Australia could face power shortages from 2018 – with Victoria and Queensland following suit, from 2021 and 2030 respectively. “ If we do nothing, we're going to see shortfalls in gas, we're going to see shortfalls in electricity," AEMO chief operating officer Mike Cleary said. "If we use the gas for electricity, the potential for shortfalls are in the domestic and the industrial (supplies). If we use it in industrial and domestic, the shortfalls will be in electricity."

According to Federal Energy Minister Josh Frydenberg, the crisis can be handled by enhancing the supply, for which the state governments are responsible. One of the principal reasons that Australia is facing an extreme gas shortage is that it exports two-thirds of the total production.

In lieu of this, the Australian Workers Union (AWU) argued that a portion of the gas production should be allotted for Australian industries and households. "Australia's abundant natural gas is our birthright. Yet we're sending it all offshore," AWU national secretary Daniel Walton said.

Furthermore, there are reports suggesting clean coal using carbon capture and storage technology will not be available until 2030. As a result, Australia may not be able to fulfil the emissions reduction targets set during the Paris Agreement. The Lock the Gate Alliance has suggested that Turnbull should make efforts to bring together the renewable energy industry.