The advisory body charting Australia's economic recovery from the COVID-19 pandemic has recommended the Morrison government support larger gas pipelines to "future-proof" the country's power supplies against increased demand.
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In a report handed to government on May 29, the COVID commission urged government to ensure future gas infrastructure could meet future demand.
It was the only recommendation in the report that called for specific support from government.
However COVID Commission chairman Nev Power told a Senate inquiry on Tuesday this would not necessarily be in the form of a taxpayer subsidy.
"A very significant component of the cost of gas on the east cost of Australia delivered into households, particularly in the south, is the cost of transportation so going forward we did make recommendations around that," Mr Power said.
"It wasn't in the form of a subsidy but rather in terms of various means of supporting to make sure we get the right capacity and infrastructure."
Pushed for further explanation by Greens senator Rachel Siewert, Mr Power said the commission called for a government guarantee on offtake or upsizing the capacity of infrastructure to ensure it was large enough to meet future needs.
"Many of our gas pipelines are too small for the job that they're currently doing and that's pushing the tariffs exceedingly high and causing an increase in the cost of energy to Australian households and businesses," Mr Power said.
"What we're saying is in the provision of new infrastructure we need to be making sure that infrastructure is the right size for any future demand."
His admissions came two months after Mr Power sought to distance himself from a leaked manufacturing taskforce report, which planned for public ownership of new gas pipelines, underwritten gas supply projects and a national gas reservation policy.
"The commission is not recommending any subsidised delivery of gas or any other energy system but we have talked about the provision of infrastructure to reduce the cost of transportation and delivery lower costs," Mr Power told a Senate committee in June.
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Mr Power also said while he was not opposed to a "green recovery", gas would be required as "firming fuel" to assist with the introduction of renewables.
"Australia has a very large pipeline of private investment in renewable generation but a very small pipeline in investment in storage and firming because those technologies are not as well advanced and they are relatively expensive and very difficult to install," Mr Power said.
"While there is some investment in it there is going to be a need for some considerable time in Australia to have firming to assist the introduction of the amount of renewable generation that we have coming in and gas is a very effective means of doing that."
Mr Power also said the commission's focus was on the "creation of globally competitive commercially viable businesses".
While the commission had given support and advice to companies that were prioritising renewable energy projects, Mr Power said their focus was on creating jobs in the short term.
"A lot of those projects that we've had discussions with are looking for substantial subsidy or support and substantial time frames to get there," Mr Power said.
"There's been a lot of conceptual discussion around renewables and their role in recovery but there's been a lot less specific projects put forward that I'm aware of."
