State Government under pressure to rein in wholesale electricity prices causing industry pain

Wholesale electricity prices have more than doubled since 2021, adding to cost of living pressures and sparking calls for the transformation of WA’s south-west grid to be “urgently” fast-tracked. A Chamber of Minerals and Energy Report being released on Friday has found that SWIS wholesale electricity prices have jumped from $46/ MWh in 2021 to $96/MWh in 2024, and reliability costs have increased five-fold amid the decarbonisation of the State’s main grid. Businesses are warning they have no choice but to pass those costs on to customers or cut jobs. CME chief executive Rebecca Tomkinson said the industry had growing concerns about the timely delivery of new power transmission lines and renewable generation needed to offset the removal of coal-fired generators due to be retired from the system by 2030. New West Foods estimates its overall cost base has increased 35 per cent with power bills up about $3500 per month, due to the high cost of refrigerator storage. It is the State’s biggest independent food supplier, trucking produce to restaurants, mine sites, aged care homes and Optus Stadium. “It is untenable, we have to pass on the increase,” managing director Damon Venoutsos said. “What we’re doing is reducing our margins and trying to find new operating efficiencies… but the consumer ends up paying for this, whether it is the cost of your skinny cappuccino or your local pizza.” “You get to a point where it’s non-recoverable… it may well suspend our future investments.” The CME report “Energy Costs In Transition” warns that the current price trajectory threatens the sustainability of resources and manufacturing industries. Ms Tomkinson is urging the State Government to fast-track an overhaul of the south-west interconnected system to make it low-emission, reliable and reasonably priced. “Failure to deliver in all three areas risks decimating the industries that are the backbone of the State’s economy,” she said. The report maps a target of 90 per cent renewables by 2040, but warned that solar and gas generation must double and wind generation increase six-fold by 2030. The modelling concluded that additional gas generation was essential. “Gas has a critical role to play as the grid’s backstop when the sun isn’t shining and the wind isn’t blowing, as has recently been the case on the east coast,” she said. It also recommended urgent consultation with industry, to establish when and where high-voltage transmission corridors would be established to incentivise renewable projects. “There is no time to waste,” Ms Tomkinson said. “Transmission lines alone will require investment of a similar scale to Metronet.” Greens MP Brad Pettitt on Thursday claimed the State Government was acting too slow on renewable energy, warning that an over-reliance on new gas projects was the wrong priority. “There’s not a single large scale renewable energy generation project under construction that will be connected to our main electricity grid in this whole State right now, which is extraordinary,” he said. “Because of that we’re going to be dependent on gas, so it’s become a self-fulfilling prophecy.”