"Australia needs about $40 billion invested in new energy infra-structure within the next decade. Only then can we be sure the lights will come on every time the switch is flicked. It's that simple and that serious," the Minister said.
Based on current electricity usage rates, Victoria will need at least an extra $3 billion to build two new base-load power stations. That's the minimum investment required to keep up with extra demand of between 1000 megawatts and 2500 megawatts over the next 10 years.
"Given that it takes between five and seven years to build these sorts of assets we are swiftly running out of time to entice some major investors," Macfarlane said.
"But quite simply the Australian energy market is a turn-off for investment because it's so fragmented, over-regulated and in desperate need of reform."
The Independent Review of Energy Market Directions has indicated a number of reforms which would save the industry $2 billion a year. That would cause retail electricity prices to drop by 12 to 14 per cent in all Australian jurisdictions.
"The national need for reform is obvious and the savings to be made are substantial but still a number of State energy ministers drag their feet. They prefer to keep their rate payers in the dark about how much they are subsidising an inefficient energy system," Macfarlane said.
"By blocking reform the State Governments must be prepared to spend billions where the private sector would normally invest - but hasn't because the market is a mess.
"They must prepared to sacrifice better hospitals, upgraded roads and basic school amenities because they will have to divert those taxpayer dollars to electricity and gas - just to keep the lights on."