Sanctions on Russia, outages in Australia’s ageing coal-fired power stations, and a blast of cold weather are fuelling a sharp rise in east coast energy spot market prices.
Manufacturers buying energy on the spot market are shouldering losses to keep customers, as they call on the federal government to secure gas reserves amid an east-coast price crunch.
“We are making losses to keep bare minimum business from our customers,” said the company’s director, Aditya Jhunjhunwala. “We are very stressed and traumatised by this, and we’re not the only ones.” Causmag is among previous Weston Energy customers now paying more than $44 a gigajoule with AGL Energy. Jhunjhunwala said the company had opted to pay spot prices to keep operations competitive when fixed prices escalated in 2016.“Our competitors in China in this industry, they are mostly using coal gas, furnace oil and coal,” he said. “But in Australia, we are obliged to use gas because it’s a [clearer] burning fuel and it helps us meet our environmental norms.
He said the heightened power bill would lead the company to increase prices by up to 10 per cent, forcing costs onto suppliers and consumers.“But arguably, it’s only if we can continue selling ... in some cases, because we export so much, we’ll get pretty quiet because we weren’t getting the orders,” Lawrence said.
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