‘Costs are rising while electricity supply is becoming less reliable’: Chamber of Commerce NT criticises Gunner Government over state of power costs, supply

THE Gunner Government has copped a stinging rebuke in the lead-up to the Territory election from the peak body representing NT businesses over rising electricity costs and unreliable supply.

The increasing cost of electricity is a hot-button election issue.

THE Gunner Government has copped a stinging rebuke in the lead-up to the Territory election from the peak body representing NT businesses over rising electricity costs and unreliable supply.

The Chamber of Commerce NT has pulled no punches in saying how it feels about the NT Government failing to deliver on lower costs for electricity.

It says the political party that wins the next Territory election needs to deliver cheaper energy for business and restore confidence in the reliability of the Top End and Central Australian electricity grids.

It has become so concerned it has formed an energy group of its members to examine the drivers of the problems facing the NT’s electricity systems and to promote a pathway to a more financially sustainable and cleaner energy future.

Chamber NT chief executive officer Greg Ireland said the Chamber was a strong supporter of the growth of renewable energy, but that the transition had to deliver lower electricity costs and lower costs to taxpayers while maintaining secure and reliable electricity supply.

“The current Government established principles of delivering lower electricity costs and maintaining system security to guide the transition to more renewables, but the opposite is occurring,” Mr Ireland said.

“Costs are rising while electricity supply is becoming less reliable.

“No one is suggesting we should not be focusing on a clean energy future, but it is becoming clear our current pathway is unnecessarily costly and is likely to lead to the lights going out during periods of supply outage.”

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Chief Minister Michael Gunner defended the Government.

“We are slashing power bills in half for businesses struggling due to the coronavirus crisis and kept power prices for households low and in line with inflation, just like we promised we would, because we know how hard it can be to pay the bills,” he said. “The best way to lower power prices is to invest in more renewables.”

Mr Ireland warned that electricity costs, network reliability and the impact of community service obligations on the public purse were key concerns of business ahead of the August 22 Territory election.

In a letter to all the major political leaders, Mr Ireland has outlined the Chamber NT’s appointment of the energy group and the Chamber’s objective to ensure that integration of increasing volumes of renewable energy results in lower, not higher, costs while maintaining energy security.

Mr Ireland said members of the energy group included representatives of major customers, thermal and renewable electricity producers, retailers, project advisers, energy industry consultants and equipment suppliers.

In its letter to the NT’s political parties it asks how they plan to manage the $100 million a year taxpayer subsidy of NT electricity supply.

“We have an increasing number of our members highlighting increases in tariffs this year of up to 20 per cent for businesses,” Mr Ireland said.

“This is clearly unsustainable, particularly in this tough business climate.

“Just as worrying are warnings from the Government’s own regulator that customers face future supply interruptions if there is not a significant change to power industry development planning.”

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Mr Ireland said the energy group noted the energy sector was a vital part of the NT economy now and would increase in importance into the future.

The Chamber said the electricity systems in the NT had historically been fit for purpose and, while stable, were sensitive to rapid change.

It says the rapid rise of solar generation capacity without adequate investment in stability mechanisms is placing NT power systems at increased risk of periodic collapse.

It expressed concern that by the end of 2020, more than 135mW of solar power will be pushed into the Top End grid during the day – at times, this power may be more than the system can handle without becoming critically unstable.

In the Darwin-Katherine system there are four large solar generation plants under construction with more proposed, along with rooftop and commercial system capacity growing at 25 per cent a year.

“The systems will push out so much power that system operators will likely need to switch the big solar farms off at different times to ensure our system does not crash,” Mr Ireland said.

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The Chamber also wants a transition strategy that it says is needed to keep Territory Generation viable in an increasingly competitive market, and to maintain its essential role in ensuring secure, reliable electricity supply day and night, 365 days a year.

It points to the fact approximately 40 per cent of gas-fired generation capacity is scheduled to retire by 2028.

It says that without new investment, the Darwin-Katherine system will not have enough capacity during the wet season.