Australians will suffer with an electricity grid that's "not fit for purpose" under the federal gas ban for new-build power generation, industry heavyweights warn.
The nation needs "decarbonisation not de-fossilisation" for a successful energy transition and new industries, Santos chief executive Kevin Gallagher said on Wednesday at an industry conference in Perth.
Alinta Energy boss Jeff Dimery warned that governments underwriting renewables coming into the market would undermine the price signal for gas, coal and other sources.
"The NEM (national electricity market) as it stands will no longer be fit for purpose," Mr Dimery said.
Questions around cost and reliability are important but power shortages are an immediate risk in NSW and Victoria, as the energy market operator has repeatedly warned, he added.
"It shouldn't come down to who has the best lobby group in Canberra," Mr Dimery said.
Alinta is also investing in expensive pumped hydro and developing the Spinifex offshore wind project off the coast of Victoria to power the Portland aluminium smelter in Portland, even though policy settings are "not conducive" to those projects, he said.
Energy Minister Chris Bowen's investment scheme for 32 gigawatts of new energy infrastructure by 2030 is a pillar of plans to transform the energy system to a reliable 82 per cent renewable grid, supported by gas, storage and new transmission.
According to gas producers, Australia also needs affordable, reliable "low-carbon gas" for manufacturers and other existing heavy industry jobs as well as future hydrogen and ammonia production.
"The demonisation of gas and undermining of CCS (carbon capture and storage) does a grave disservice to Australian society," Cecile Wake, a senior vice president at Shell Australia, said.
Origin Energy has backed calls for Mr Bowen's scheme to include taxpayer support for fast-start gas plants to keep the lights on.
Resources Minister Madeleine King's future gas strategy acknowledged the need for gas-fired electricity as coal comes out of the system, Origin boss Frank Calabria said.
With Perth awash with executives and investors, Ms King told a separate mining conference in the resources capital "we must act now or the world will move on without us".
"Iron ore, coal, gas, and oil have paid for our way of life for over 60 years. But we can't sit back and do nothing as the world changes around us," she said.
The party's influential green arm, the Labor Environment Action Network, has rallied to secure Victorian Labor's opposition to the recently released Future Gas Strategy.
And in NSW - still reliant on coal and gas - the government said the planning system must consider state emission-reduction targets and the Climate Change Act's principles when weighing new projects.
But gas was more than an insurance policy for reliable power, as shortfalls are getting closer and closer, Mr Calabria said.
Amid fierce opposition from Gomeroi traditional owners and environmentalists, Santos' $3.6 billion Narrabri project could supply half the gas used in NSW homes and businesses.
"If there's not further supply into those markets, you've got two choices - you've got to transport gas from Queensland or you're going to have an import terminal," he said.
The reporter travelled with the support of Chevron Australia.
