As more coal-fired power stations are decommissioned, including notable plants like Liddell and Eraring, the shift will further impact grid stability and costs (Wikipedia: List of coal-fired power stations in Australia). The closure of Eraring, in particular, has been delayed through an agreement between Origin Energy and the NSW Government, but this extension will still have implications for future energy prices (Origin Energy: Eraring closure delay).
In addition, as Australia’s population grows, energy demand is on a steep upward trajectory, as illustrated by the Australian Bureau of Statistics' population clock and pyramid, which tracks the nation’s expanding population and its potential impact on energy consumption (ABS Population Clock and Pyramid).
Wholesale Prices Under Pressure
This shrinking supply and growing demand create a perfect storm for electricity prices:
Supply Scarcity: As coal plants close, the grid loses a reliable and flexible energy source, driving up wholesale prices.
Renewables Integration Costs: Transitioning to renewable energy requires substantial investment in infrastructure and grid upgrades, costs that will inevitably be passed on to consumers.
Negotiation Leverage: Owners of coal plants nearing closure, such as Eraring, may extend operations but only under lucrative agreements with state governments, further adding to costs (abc.net.au).
What This Means for Businesses
Businesses are already grappling with volatile energy prices, and the next decade promises even greater challenges. Rising wholesale costs will trickle down to electricity bills, straining operating budgets. For SMEs in particular, unchecked energy expenses could erode profit margins or necessitate passing costs onto customers.
Why Acting Now is Crucial
The key to mitigating these challenges lies in preparation and proactive energy management:
Partnering with Energy Brokers: A professional broker can analyse your current energy contracts, identify inefficiencies, and negotiate better rates tailored to your business needs.
Exploring Renewable Options:Solar installations or other renewables can offset rising grid costs, especially with government incentives still available.
Demand Forecasting: With grid demand expected to double by 2033, understanding and planning your energy usage now can save significant costs in the future.
Take Control of Your Energy Future
The energy market is shifting, and businesses that act decisively will be better positioned to weather the changes ahead. At Choice Energy, we specialise in helping companies navigate these challenges, ensuring you’re not just reacting to higher electricity rates but proactively managing your energy strategy.
Contact us today to schedule a free consultation and take the first step toward securing your business’s energy future.
