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Australian Industry Group's Shocking Research

The report, "Energy shock: confronting higher prices," underlines a few key points – retail energy prices will likely at least double by 2015 (mostly as a result of rising coal and gas prices, and network upgrades) but despite this few companies are looking at improving their energy efficiency. The report concluded that a carbon price would add to growing energy costs, but would account for less than one third of the anticipated price rises, which are driven mostly by network upgrades and had been made more expensive by movements in the wholesale markets driven by drought and the mining boom, surging peak demand, ageing legacy networks, and an escalation in material and labour costs. Higher coal prices – as well as rising gas prices, as local prices reach parity with the international price, a situation driven by the rush of LNG projects in the eastern states – would also contribute to rising prices. The report said renewable energy contributed less than 1 per cent of the retail price in NSW in 2009/10 and will reach no more than 3 per cent in 2012/13. However, it said support for small-scale renewables under the Renewable Energy Target was making support for large-scale renewables less cost effective. AIG CEO Heather Ridout said one of the major concerns was the lack of engagement on energy efficiency. The AIG survey found that nearly two thirds of Australian companies had not improved their energy efficiency over the past five years, and almost as many did not anticipate making improvements in the next two years. "This is a worrying result,” she said.

Monday 21st February 2011