Skyrocketing energy prices are putting jobs at risk while politics-driven energy policies are “making a bad situation worse”, according to a new report by Ai Group.
The report, Energy shock: No gas, no power, no future?, highlights rising gas exports, the closure of coal-fired power stations, record electricity demand and onshore gas development restrictions as factors driving up energy prices.
Australian Industry Group chief executive Innes Willox said the survey added to the weight of evidence that rising energy prices are exposing businesses and may see Australia losing jobs and business activities offshore.
The survey found more than half (51%) of businesses expected price increases in the coming year and only four per cent expected a decrease.
“Most businesses sign energy contracts of more than one year, and price increases take time to filter through,” Mr Willox said.
“Long-term gas contracts are getting harder to obtain (worsened by a non-transparent market) and onerous take-or-pay provisions mean more risk for users (especially large ones).
“Politics-driven energy policies are making a bad situation worse – this includes decisions to put gas development on hold in NSW, Queensland and the Northern Territory, partisan warfare on energy and climate at the federal level, and entirely uncoordinated state renewable energy targets.
“Achieving lower energy prices will not be easy: gas faces international price parity and rising production costs, while all new electricity generation looks expensive and new investment is needed.”
According to the report, household costs could go up by $3.6 billion a year, while businesses could end up paying an extra $8.7 billion a year.
Ai Group said an increase in gas development, meeting the renewable energy targets, and settling national coherent energy and climate policy reforms would help keep prices low and jobs onshore.
The survey was based on responses from the CEOs of 285 private-sector businesses across Australia.