ACCC urges energy crisis action

ACCC chairman Rod Sims says the country’s energy crisis needs urgent action, as he was addressing the National Press Club, telling members the energy affordability issues are already hitting the Australian manufacturing industry hard.

Sims says, “We at the ACCC have been sounding the alarm in relation to business energy costs for some time. It is great that there is now considerable focus on this issue. We have gas affordability issues for completely different reasons to those driving our electricity affordability issues. The gas shortage, however, is making the electricity affordability issues worse.

“Moratoria and other regulatory restrictions in New South Wales, Victoria and Tasmania are preventing or impeding onshore gas exploration and development in those states, and particularly causing higher gas prices in the south.”

Currently, the ACCC is inquiring into the affordability of retail electricity and gas market supply and deman, with a draft submission due at the end of this month with the full report due next June.

[Related: PIAA defends Finkel Report]

Sims addressed a number of issues that have contributed to the current electricity affordability crisis, particularly rising network costs, but also market concentration in generation of electricity.

He says, “The rules never envisaged a generation market as concentrated as what we now have. In each state the combined market shares of the two or three most significant generators is well over 70 per cent, sometimes much higher.”

Mr Sims highlighted a number of affordability concerns across the retail, green, generation and network segments and said the ACCC would now focus on a range of affordability measures.

“We are told we have three issues to deal with in electricity: reliability, sustainability and affordability. Basic economics says with three problems you need three different solutions. Beware of silver bullets that are said to address all three objectives,” Mr Sims said.

Peak print body the PIAA has been lobbying to both sides of parliament for the past year for more energy affordability and reliability, as many of its members are suffering due to power outage and outrageous price rises.

Andrew Macaulay, CEO, PIAA says the industry body was the first to hound the government over this issue. The PIAA is continuing with string representations to MPs, Senators and Ministers, and says its lobbying was instrumental in the National Party voting to end subsidies to renewables, impact directly on government policy.

Printers in SA – which has pioneered a sustainable energy path – suffered a power outage last year due to inefficiencies in supply, with SA and Vic predicted to suffer more outages this year,

ProPrint asked its readers earlier this year if there needs to be legislation for the energy crisis with nearly three quarters of all printers wanting some sort of legislation. Twelve per cent says legislation will not change a thing, nine per cent says they do not think legislation will help, while six per cent say even if it did happen it probably will not change a thing.

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