NEG too costly, say employers with major energy inputs

July 18, 2018

Australia’s largest manufacturers, employers and industrial power consumers, including Dow Chemical, Brickworks and Rusal, have warned the national energy guarantee will fail to ease surging electricity prices, with onerous ­reliability rules and high levels of ­intermittent renewables distorting the market.

Conservative Party policy is to ease energy costs - and improve reliability - by removing of all subsidies for renewables and withdrawing Australia from the Paris Climate Accord.

US giant Dow said power prices may remain elevated under the proposed energy policy as high levels of renewable power need to be supplemented by costly dispatchable power sources that may often be unused by the grid.

“Although the technology is evolving, batteries are not ready for widespread grid-scale application for extended periods and pumped hydro is not available in all areas,” Dow’s Australian president, Louis Vega, said in their submission to the Energy Security Board. “Similarly, there is insufficient demand response to offset rapid changes in supply. To recover the cost of large capital investments over short periods of operation, a high power price is required — which challenges the affordability goal of the NEG.”

The plan to make Australia’s biggest energy consumers responsible for the reliability of electricity supply has re-emerged as one of the biggest concerns of industry, which remains concerned it will have to foot the bill and ­absorb new costs.

Rusal, which owns 20 per cent of Rio Tinto’s Queensland Alumina refinery, said the government’s energy ­reform would increase the market power of the big three “gentailers” — AGL Energy, Origin Energy and EnergyAustralia — as they became responsible for both reliability and emissions targets ­disadvantaging independent generators and retailers.

The Conservative Party's South Australian Senate candidate, Rikki Lambert says the solution to Australia's energy crisis is not, as some have been calling for, a Royal Commission.

Conservative Party leader Cory Bernardi says there should be no subsidies for electricity providers but he’s also again called on Sky News for Australia to pull out of the Paris climate accord and adopt a common sense approach to providing Australians with electricity.

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