Industry Update Issue 103 August/September 2018

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AUSTRALIA'S LARGEST CIRCULATING MANUFACTURING MAGAZINE

Industry Update

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Issue 103 AUGUST/SEPTEMBER 2018 $12.00 INC.GST

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POWER POLITICS While debate continues about the National Energy Guarantee and the role of renewables within the national mix of generation, Australian industry remains saddled with elevated energy costs that threaten its international competitiveness and in some cases its very existence. Although gas and electricity prices have moderated from their historic highs of 12 months ago, they are still at levels that leave many questioning how an energyrich nation like Australia could come to this point. “It’s staggering with the amount of energy that we export that we can’t satisfy local demand at a reasonable price,” says Mark Ferguson, CEO of Southern Cross Compressors. “Costs

need to halve for Australia to be competitive again,” he adds, citing the plight of many local Victorian businesses that are struggling to keep afloat while negotiating their new supply contracts. Many are reporting a doubling of energy contract prices, and stories like that of Cheltenhambased printer Complete Colour (see p20), which was quoted a 135% increase are not uncommon. It doesn’t help that there is

no single cause of the problem, apart from a decades-long lack of stable government policy that has made any large-scale investment in generation assets a risk too far for any commercial generator. However, successive reports from various bodies have identified any number of causal factors. Of these, this year’s investigation into the National Energy Market (NEM) by the ACCC was the most comprehensive, and dared to suggest that it is the way in which the NEM is structured that has enabled generators to “game the system” by withholding supply Continued page 4

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