Treasurer Jim Chalmers admits he's concerned some manufacturers could close in a matter of months as soaring energy prices heap pressure on Australian industry.
National Electricity Market wholesale electricity prices have tripled compared to a year ago as record September quarter rates reached $216 per megawatt-hour, the latest Quarterly Energy Dynamics report shows.
But that figure is down from $264/MWh in the prior three months, when the Australian Energy Market Operator (AEMO) intervened to rein in soaring costs and the Victorian government imposed its own price cap.
Tuesday's budget warned retail power prices were expected to rise by 56 per cent over the next two years while gas prices would also increase sharply, adding to producer and consumer price inflation.
Dr Chalmers said he understood the pressure faced by Australian industry, adding his government would consider taking further steps to support it.
But he stood by the budget's lack of energy price relief, despite calls for the government to pass on money it's banked from soaring export earnings.
Instead, the treasurer flagged potential intervention by industry regulators.
Deputy Liberal leader Sussan Ley said price caps and injecting more supply into the market were measures the government could take.
"There are a whole range of levers that the government has access to," she told Sky News.
Union boss Sally McManus said price caps in tandem with a tax on the gas industry would ease cost-of-living pressures for Australian workers.
"Isn't it just wrong that these companies are extracting this from our country at a time when prices for us are going up, and they're making all these profits out of it? Average Aussies are suffering," she said.
"Putting limits and caps on prices at this time is not a bad idea. Couple that with windfall profits tax and you can divert money to cost-of-living relief for people."
As the economy restarts after the pandemic, rising energy demand is being met by gas-fired power plants and renewable sources - wind, hydro, solar farms and rooftop solar - with coal-fired generation in decline.
An all-time instantaneous renewable generation record of 64.1 per cent was struck on September 18 and grid-scale solar and wind generation reached a new quarterly average record at 4465 megawatts.
But war in Europe and price spikes for coal and gas are firing up electricity prices in an Australian energy grid that's still dependent on fossil fuels.
East coast gas prices have surged 142 per cent on a year earlier, averaging $26 per gigajoule over the quarter although that figure was below an average of $28.40/GJ in the three months to June.
Victoria's gas production surged 12 per cent as Longford, which supplies 20 per cent of east coast gas, hit a five-year record for the quarter.
Signalling no respite for energy users, AEMO said market activity showed a generally higher cost of energy rather than short-term extreme prices driven by scarcity.
