Small businesses struggling to pay electricity bills as government steams ahead with transition to renewables

Small Aussie businesses — including a gym home to Olympic gold medallists — are in disbelief at sky-high electricity bills, forcing many to question their future.

Small businesses smashed by big electricity price hikes are questioning whether the transition to renewables is being rushed, as the federal Opposition steps up its fight against early closure of coal-fired power plants.

Over the past two years, small business electricity bills have surged by more than 30 per cent cumulatively in NSW and South Australia, as well as most of Victoria and Queensland, analysis shows.

In some areas, costs are 50 per cent higher than they were in 2022, according to the analysis for leading advocacy group Energy Consumers Australia.

ECA chief executive Brendan French said power companies and governments should provide more help.

“While energy retailers are obliged to offer hardship assistance to residential customers, there is no obligation to do the same for small businesses, although some certainly do. This is a significant problem, and one that needs considerable attention,” Dr French said.

Energy Consumers Australia CEO Brendan French. Picture: Supplied

“We welcomed the help provided for small businesses in this year’s federal budget, (but) we’d like to see governments provide tailored supports for small businesses.”

Other research for the Council of Small Business Organisations of Australia reveals the price of power is the top concern for owners.

“It’s not just an issue, it’s the issue,” said Cosboa chief executive Luke Achterstraat, adding that many operators are “fearful that things will get harder before they get easier.”

South Australian bakery owner Victor Wearne said his power prices had gone up by 25 per cent in six months.

Victor Wearne, owner of Glenelg bakery Sugar 'n Spice And All Things Nice. Picture: Supplied

Until recently, the pies and cakes he makes at Glenelg’s Sugar ’n Spice And All Things consisted of entirely Australian ingredients.

“Now I am just starting to go to fats and oils that are made in Malaysia because they are only half the price,” Mr Wearne said. “We don’t want to do it but we have to.”

At Atmosphere Fitness in western Sydney, the cost of power has doubled since last year. The high-end Penrith facility, used by the likes of Olympic gold medallists Jessica and Noémie Fox, is now paying $27,000 a month.

“I couldn’t believe it when the bill came through,” Atmosphere’s manager Deb Vitols said. “I couldn’t sleep for three nights.”

Atmosphere Fitness manager Deb Vitols. Picture: Sam Ruttyn

Ms Vitols said she believed governments hadn’t “set us up for success” in the energy transition.

“I think they have pulled the trigger too quickly” on station shutdowns, Ms Vitols said.

Mr Wearne said it appeared that governments had not “looked into all the things that have to be put in place first” before switching off gas and coal.

Federal Opposition energy spokesman Ted O’Brien said price rises were due to the Albanese government hastening the demise of fossil-fuel-fired plants.

Ted O'Brien during Question Time at Parliament House in Canberra. Picture: NewsWire / Martin Ollman

“You do not prematurely close your 24-7 baseload power stations,” Mr O’Brien said.

Energy Minister Chris Bowen said Labor hadn’t brought forward closures.

“Australians are paying the price for a decade of inaction under the former Coalition government that left us with an out-of-date energy system that is vulnerable to international price spikes and reliant on increasingly unreliable, expensive, ageing coal plants,” Mr Bowen said.

“The Coalition’s plan to extend coal plants beyond closure dates set by plant owners is only a recipe for expensive blackouts.”

Mr Bowen added that the industry regulator had found power prices for small businesses in NSW, Victoria, southeast Queensland and SA would fall in 2024-25, aided by ongoing bill relief from the Albanese government.

Originally published as Small businesses struggling to pay electricity bills as government steams ahead with transition to renewables