EUAA Tasmanian Energy Forum
Hobart 7.30am Tuesday 22nd March 2016
A quick energy update, Hydro Tasmania Energy in Storage has dropped into uncharted territory at 15.5%. The state is now running diesel generation in addition to gas fired generation to meet demand. Basslink have provided an updated media statement, saying they have further narrowed the probable fault location and are therefore moving to the cable lift, cut and cap phase of the operation. Best estimates for the Vic/Tas interconnectors return to service are now late May 2016.
Spot market prices, which averaged below 4c/kWh last financial year, are now averaging 24c/kWh March month to date. Whilst forward wholesale contract prices for delivery in the 2016/17 Financial Year, which were around 4.4c/kWh in March 2015, are now at around 5.6c/kWh this week, representing a 26% increase.
Whilst residential and small business consumers on regulated tariffs have been protected from these increases, stories of commercial, industrial and agribusiness impacts have started to emerge. Those worst affected have been a handful of Tasmanian businesses who enjoyed low Tasmanian spot market pricing since 2010, but of late have found the spot price now more than 6 times above those levels. These are followed by businesses who allowed their contracts to lapse in early 2016 and found that first and second quarter 2016 contract prices (to 30 June 2016) had doubled, leading to total delivered energy cost increases in the order of 35% or more. Needless to say, those business people speaking openly about these impacts tend to be owner/managers, whilst those who report to others have been far more discreet.
The next group of businesses impacted are those with contracts which expire on 30 June 2016. As mentioned above, with wholesale pricing for Financial Year 2016/17 currently at 5.6c/kWh and depending on when these businesses last contracted, this group may be facing a 26% increase on energy rates which will translate to around a 10% increase on total delivered energy costs, plus increases in the cost of Large Greenhouse Gas Certificates (LGC's/LRET).
So what can you do to mitigate the impacts on your business? For a start, make sure you are well informed by attending the Energy Users Association of Australia Tasmanian Energy Forum in Hobart at 7.30am on Tuesday 22nd March. Goanna Energy Consulting are a Major Partner of this timely must see event and Goanna clients can join in at EUAA Member prices ($200) by downloading the EUAA/Goanna Registration form here: http://www.goannaenergy.com.au/documents/2016_01_EUAA_TEFRego_GoannaEnergy.pdf
and download the full Program here:
ABC Radio National's Fran Kelly interviewed me last Monday on the Basslink Failure and you can listen to the 7Min Audio here: http://www.abc.net.au/radionational/programs/breakfast/tasmania-relies-on-hydro-electricity-as-underwater/7225260
Telephone me on 0418 596 162 for more information, or Follow me on Twitter at https://twitter.com/MarcBWhite