Investor News

Cost of power strangling the economy

There's a state election in Queensland, and power prices are a major issue.

The below article from ABC Online highlights the launch by Canegrowers, the Queensland Farmers Federation, and the Chamber of Commerce and Industry Queensland of the Queensland Industry Energy Alliance with the aim of putting downward pressure on prices.

Travis Tobin, Chief Executive of the Queensland Farmers Federation, describes the alliance's objective as follows: "It's far better to price electricity efficiently and have that money flowing through to businesses that can stimulate economies and regional communities rather than having it in Treasury coffers."

The reference to 'Treasury coffers' reflects the state-owned nature of Queensland's power companies.

So how do Queensland power prices compare to the rest of the National Electricity Market (NEM)?

Publicly available data available through the AEMO website paints the following picture:

Queensland electricity prices for 2017 were 41% higher than their 5-year average, making it the second most expensive state behind South Australia.

The point?

"The cost of doing nothing has become greater than the cost of doing something for Government."

A further dive into the data shows this is an issue for all states.

Take Victoria, for example.

This is what happened when the state lost a quarter of its brown coal-fired capacity with the closure of Hazelwood, resulting in a more than 40% year-on-year jump in average prices.

The economic impact of the rising electricity price is compounded by the rising gas price, which has doubled since the 2016 March quarter (Australian Energy Regulator).

Many Victorian businesses face the same issues as their Queensland counterparts.

This has presented an opportunity for ECT. As outlined in previous announcements, we're pursuing the opportunity to fill the gap left by the closure of the Morwell briquette plant.

Many Victorian businesses rely on utility-scale heat generation, such as timber drying and milk pasteurisation. Unfortunately, wind and solar can't provide this type of process heat. Gas can, but the cost has skyrocketed to the point that it threatens business viability, which in turn threatens jobs and broader economic security.

Our aim is to develop a Coldry solid fuel alternative to high-priced gas to help restore affordability and reliability to the Victorian energy market.

We're pursuing this aim initially by selling small tonnages of Coldry from our high-volume test facility in Bacchus Marsh to companies like AKD Softwoods.

We've also commenced a feasibility study into establishing a large-scale Coldry demonstration plant in Victoria, which could help improve long-term energy affordability and reliability.

Read more below...

Queensland Industry Energy Alliance launches with agricultural allies joining forces to tackle power prices

ABC Online | ABC Rural - ABC News | 8 Nov 2017 | By Kallee Buchanan

Electricity to power irrigation infrastructure is a major cost in the agricultural sector. (ABC News)

Canegrowers, Queensland Farmers Federation and Chamber of Commerce and Industry Queensland to put pressure on power prices...

Electricity to power irrigation infrastructure is a major cost in the agricultural sector. (ABC News)

Canegrowers, Queensland Farmers Federation and Chamber of Commerce and Industry Queensland to put pressure on power prices...

Source: Queensland Industry Energy Alliance launches with agricultural allies joining forces to tackle power prices - ABC Rural - ABC News