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High prices + Slow growth = Low demand

Aug 10, 2012

Mitch Williams MP

Deputy Leader of the Opposition
Shadow Minister for Water and the River Murray
Shadow Minister for Energy and Mineral Resources Development


High prices + Slow growth = Low demand

A report released by the Australian Energy Market Operator (AEMO) has detailed how high power prices and a sluggish economy have seen reduced demand on electricity infrastructure in South Australia.

The AEMO 2012 Electricity Statement of Opportunities Report was released this week and Shadow Minister for Energy Mitch Williams said its findings were bittersweet.

“The good news is that AEMOs latest predictions are that we don’t need to invest in new capacity in South Australia. 

“The bad news is the reasoning;

“Short-term moderation in gross domestic product (GDP), reduced manufacturing consumption and consumer response to rising electricity prices.”

“While it is fantastic that South Australia is not going to have to make any investment in energy generation in the short term, it is disappointing that this is due to our failing economy and skyrocketing power prices.

“South Australians should be breathing a sigh of relief that we are not going to have to build more capacity in the short term and we therefore won’t be funding investment through our electricity bills.  However, we must be concerned that our falling GDP and manufacturing rates are the reason.

“The estimate for 2012/13 for our expected required capacity to meet demand has dropped by 10 per cent which reflects a huge downturn in our economy. 

“The other factor is our ever increasing electricity prices.  Many people simply cannot afford to use their power.  We are hearing stories in our electorate offices of pensioners who simply can’t turn on their heaters this winter because they cannot afford their electricity bills.” 

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