Power price pain to stay over short term

Chris Bowen says people understand the government can't immediately reform the energy sector.
Chris Bowen says people understand the government can't immediately reform the energy sector.

Energy Minister Chris Bowen has acknowledged Australians will face an imminent rise in power prices, as the government looks to shore up the nation's energy grid.

With energy costs not expected to ease in the short term, Mr Bowen said it would take time to implement the new government's plan to transition to renewables.

"It will take a while for our policies to work. I think people understand you don't fix 10 years of neglect in 10 days," he told the Nine Network on Thursday.

"We have to build 10,000 kilometres of transmission wires to get our system up and running. You don't do that in six months, you don't do that in a year."

It comes as the Australian Energy Market Operator began lifting the suspension of the national energy market on Thursday morning.

The market will now be allowed to set the price, with its operator then monitoring to ensure problems with the sector don't immediately return.

The next step for the operator would be to entirely lift the suspension.

Mr Bowen criticised the former coalition government for delaying news of a July 1 power price hike until after the election.

"The old government sat on that prior to the election. It had to be released under the new government, the news that energy bills were going up," he said.

"The old government knew about it but didn't do anything to get the figures out before the election. Surprise, surprise."

Opposition Leader Peter Dutton hit back at the claims, saying Mr Bowen had had a "very bad start" as a minister.

"It's clear that the energy companies gamed him and took advantage of his naivety and his inexperience," Mr Dutton reporters in Canberra on Thursday.

"That's why we saw warnings to pensioners about turning air conditioners off during winter, and that's why there's great uncertainty about the energy supply at the moment."

Mr Bowen also flagged bringing forward the introduction of the capacity mechanism, which will help shore up energy supply, from 2025.

"I would like it to happen earlier than that. I'll be working with the states and territories to ... make that the case. I've been clear about that," he told the ABC.

"This is an important safety net."

Mr Dutton said the issues that had led to the energy crisis had been around for some time, but were handled more effectively under the previous government.

"Ukraine hasn't just become an issue, the energy crisis in Europe hasn't become an issue, in the last four weeks," he said.

"Bad governments respond by shrugging their shoulders."

Market operator chief executive Daniel Westerman said there would be a step-by-step approach in lifting the market suspension.

He said there had been vast improvement to the market, with about 4000 megawatts of generation being returned to the energy grid after outages.

"We know many generators are working hard and closely with governments to improve the confidence of their fuel supply, to ensure that they are able to operate at their desired level of output," Mr Westerman said.

The market operator expects the system used to schedule energy generation into the grid would be operating without failure.

This was due to a low volume of directions to generators and a reduction in forecast shortfalls of energy as electricity suppliers respond to market signals.

Australian Associated Press