Australian energy ministers are locked in discussions to consider potential price caps on both gas and coal – at prices as low as less than half the current market rate according to some sources – in a bid to bring soaring energy prices under control.

The discussions – part of talks on a range of energy issues – have copped considerable criticism from industry. Unsurprisingly really given that the $13 per gigajoule price that has been bandied around will impact on their bottom line.

States that benefit from energy prices – such as Queensland – will also have to be compensated for their potential loss of revenue.

This is a potential sticking point which could scuttle price caps talks. Too high a cap and not enough compensation, which will invariably come out of the budget, will likely result in little to no action being taken.

Is that likely? Quite possibly. Alternatively, we could see a big hit on the budget if the Federal Government chooses to prioritise its promise to reduce the cost of living over balancing the books.

We could of course see a less onerous – for affected companies and states – price cap that also limits the amount of compensation the Albanese Government has to cough up. The perfect compromise which leaves no one entirely happy.

No need for gas or coal for secure energy?

In what might well be a sign of things to come, Victoria appears to have rejected the need to have coal and gas powered generators available on hand to secure energy supplies when wind and solar are offline under the capacity mechanism talks.

Having secured another term in office, the Labor state government is likely to hold firm to its mandate to back only renewables.

While the capacity mechanism is likely to favour the shift away from fossil fuels, Victoria’s views are likely to find favour with the green crowd.

Central to the state’s push towards renewable is green hydrogen generation, which will not only secure energy supplies but potentially generate additional revenue and jobs.

While some of these goals are ambitious to say the least, it will still provide the impetus for Victoria to accelerate the adoption of renewables and hydrogen.

There’s also something to be said about the likelihood that not meeting more ambitious goals might still leave the state further ahead than meeting less progressive objectives.

It will certainly drive plenty of economic activity, which might be part of the point.