Low-cost energy used to be Australia's biggest competitive advantage... now it's our biggest source of comparative disadvantage.
The below article from The Australian ($) highlights the negative economic flow on from high energy prices due to failed energy policy, as reported by ACCC Chairman, Rod Sims:
Lost jobs
Reduced investment
Plant closures
The ACCC has been tasked with finding ways to reduce the cost of electricity and gas as energy-intensive industries consider relocating their operations to the US.
The Business Council of Australia also chimes in, confirming:
“... competitive advantage in energy costs has been eroded after a decade of poor and unco-ordinated policy, disadvantaging businesses and consumers alike.
“Households and businesses simply do not care about the petty politics of climate and energy policy — they care about being able to pay their bills.”
Despite ringing alarm bells, Sims has no solutions yet. The aim is to deliver two major reviews on improving the electricity and gas markets.
Gas prices have doubled and in some cases tripled, from $5 per gigajoule to $15. This means some industrial gas users are paying double the international rate.
The impact on gas prices stems from a combination of supply and demand pressures.
On the supply side, local producers are keen to fill overseas orders, and the NSW and Victorian governments have banned the development of new onshore gas fields.
On the demand side, there's an increased reliance on gas-fired power stations. The reason is two-fold: One, to fill the gap left by the closure of coal-fired power stations in South Australia and Victoria, we've had to rely more on our gas plants, which previously only covered limited peak demand. Second, increased penetration of wind and solar, which requires increasing backup capacity when the wind doesn't blow or the sun doesn't shine.
Adding to the impact of gas prices on electricity costs is the high price of wind and solar, which remain neither reliable nor affordable.
The solution, we believe, is to deploy HELE coal-fired technology to deliver affordable, reliable power with lower emissions.
Read more...
Cut power bills or lose more jobs: ACCC chief’s warning on energy costs
Glenda Korporaal | The Australian | 30 December 2017
Australia’s competition regulator, Rod Sims, who has been tasked with finding ways to cut power bills, has warned that high energy costs will force more plant closures and job losses as prices continue to increase.
