World Grain - July 2018 - 59
out this was not the sole reason an offshore opportunity
would turn the company's head.
There is complexity in landing the government policy
required to address these rising energy costs. In Australia,
the energy costs are largely state-based. However,
the federal government also plays a role. In October
2017, Federal Environment and Energy Minister Josh
Frydenberg put forward a proposed National Energy
Guarantee (NEG) to the state energy ministers.
If the proposal succeeds, the federal government says
NEG will ensure affordable and reliable energy allowing Australia to meet its Paris Agreement commitments.
The issues around policy uncertainty are echoed by
Cobb, who said he and others in energy intensive indusWULHVDJUHHLWKDVPDGHDVLJQL¿FDQWFRQWULEXWLRQWRWKH
problem. "The market (energy retailers) have priced in
risk created by uncertainty in energy infrastructure and
pricing on a state and federal level," Cobb said. "This
has had a snowball effect among retailers who panic
leading into summer and peaked in March 2017."
Cobb said old power stations being taken off the grid
without new power generation entering the market is
creating an imbalance between capacity and demand
that leads to the doubling of price.
"We're not seeing a proper market response as government policy fails to frame energy generation over
the years to come," he added.
Policy development and discussion is ongoing, and
the COAG Energy Council (made up of federal and state
governments) was scheduled to release in mid-June papers for public discussion. Still, the politics is fraught
www.World-Grain.com / World Grain / July 2018
with disagreement even within the federal government
on how to balance affordable energy with bringing on
new, cleaner power generation technologies.
Meanwhile, business is getting creative in managing
high energy prices by investing in technology that is
or uses energy smarter. If power prices remain high,
energy savings will become increasingly important for
the Australian grain industry that must compete with
grain sellers in the world market, particularly those
producing a similar grain quality at lower cost.
Lauke Flour Mills
in Australia has
installed LED lighting, power factor
that shuts down
power and lighting
when machinery is
not required. Photo
courtesy of Lauke.
Chris Gillies is a freelance writer based in Sydney, Australia.
He may be reached at firstname.lastname@example.org.
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