From July this year, there will be a significant increase in wholesale electricity prices for NSW. This has sparked fears that the cost of doing business in the state will be so high that manufacturers will be forced out.
While NSW wholesale electricity prices were stable for a number of years, prices have increased by 57 per cent since July 2016, and are expected to rise a further 10-20 per cent from this July.
The price hike has been attributed to the closure of Victoria’s Hazelwood power plant, as well as South Australia’s Northern power station. Rising investment in renewable energy is also said to have contributed to the rise.
Some experts have expressed fears that NSW will go down the same path as South Australia.
“Manufacturing is fleeing South Australia because the cost of doing business is just too high and before too long NSW will be in the exact same situation,” the Australian Power Project’s Nathan Vass told News Corp.
Experts have suggested increasing domestic gas supply, building more coal or gas-powered stations or extending the lives of existing ones as methods to stop wholesale prices from increasing further.