INDUSTRY
DEVELOPMENT
COUNCIL: ALL TNQ STATE ELECTORATE: CAIRNS, BARRON RIVER, COOK, HILL FEDERAL ELECTORATES: KENNEDY
STRATEGIC ENERGY SECTOR FRAMEWORK BRIEFING NOTE SUMMARY • Electricity prices are unsustainably high in TNQ which restricts business profitability and new investments that drive economic growth. • The TNQ energy sector is defined by three distinct energy markets: (1) High Demand Fringe of Grid (Cairns); (2) Fringe of Fringe of Grid (rural towns and properties closer to Cairns); and (3) OffGrid (remote towns and properties). • Surveys indicate 15% of regional Queensland businesses have cut staff hours or reduced staff numbers in response to escalating electricity bills. • A TNQ Energy Sector Strategic Investment Framework is proposed to drive affordability, reliability and transition in the TNQ energy system. This Framework would require shared State and Federal Government investment of approximately $1.5 million. • A State Government CSO of $465 million is in place. However, a 5% headroom charge is still applied statewide which removes the benefit of the CSO in TNQ.
ADVANCE CAIRNS
THE ISSUE
Tropical North Queensland (TNQ) faces unsustainably high electricity costs to the detriment of regional industries, small, medium and large enterprises, and domestic consumers. An estimated 75% of electricity consumed from the Queensland energy grid is by business customers and more than 97% of Queensland businesses are small business, making up 44% of jobs in the State. Given TNQ’s proximity to two world heritage listed assets, the Great Barrier Reef and the Wet Tropics Rainforest, the vision for the region is energy sector reliability, affordability and a seamless transition to reduced carbon emissions. At present, the region suffers significant energy reliability, affordability and transition challenges, while also providing opportunities such as energy export. Despite policy instability over the last decade, there have been major new investments in the region in wind, solar, biomass and hydro-power electricity generation. As more stable State and Federal energy policy frameworks are beginning to emerge, to achieve energy reliability and affordability while also transitioning to reduced carbon emissions, TNQ will require a region-wide strategic investment framework that has bilateral Government support.
OUR REGION ONE VOICE
THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND
ADVANCE CAIRNS 2020 STATE BUDGET SUBMISSION
BACKGROUND
Current energy prices seriously impact business and domestic consumers, adding to cost-of-living pressures and resulting in business and industry restricting their regional economic growth opportunities. While subsidies exist for domestic consumers, industry operates in a largely unsubsidised environment, making energy a critical influence in decisions to invest in TNQ. Across northern Queensland, inefficiencies in the electricity network drive the case for increased power generation. High transmission losses and fuel transport needs highlight the overwhelming costs of supplying power across the region and universally, the efficiency and reliability of TNQ’s energy supply needs to be assessed and improved. In response to escalating energy costs, the Queensland Electricity Users Network (QEUN) conducted a regional business survey in 2018 and identified that 15% of regional Queensland businesses had already cut staff hours or reduced staff numbers in response to escalating electricity bills. In addition, 30% would consider cutting staff if electricity prices rise again while conversely, 24% would consider expanding their business if electricity prices fell. The survey also identified five business sectors in regional Queensland greatly concerned about their ability to pay their P 34