Energy prices and tariffs are going up
Energy prices and electricity tariffs have been going up in the last few years. This upward trend will continue for a number of reasons:
- Prices for energy resources, especially fossil fuels, will go up as there is increasing demand for these limited resources.
- Electricity generation costs have been going up, due to increasing resource prices and the need for new infrastructure, so tariff increases are inevitable.
- In WA, electricity tariffs had been being frozen for 5 years, prior to 2008, now they have to catch up with generation costs which have almost doubled.
Can you afford to carry on Business As Usual?
In the past, energy costs have been low, and businesses often regarded energy expenditure as a fixed cost. This is no longer the case, energy prices and tariffs will keep going up. If you carry on Business As Usual, you will miss the chance to increase profits, and lose your competitive edge. So you can't afford to carry on Business As Usual
Let's have a look at a scenario1 where a business started with a $100,000 annual electricity bill in 2009:
In the case of Business As Usual (BAU), their electricity bill would be double in less than five years (assuming no change in usage).
If the business takes Energy Efficiency measures and cut their electricity usage, they can beat the tariff increases and the Carbon Tax, and save themselves $$$.
1 The impact of Synergy tariff increases of 17.5% (2010) and 30% (2011), and predicted increases due to Carbon Tax and "catch up" with generation costs have been factored into the BAU and Energy Efficiency scenarios. The latter assumes that 15% savings in the first year, 10% in second year, then another 5%pa for the next 3 years were made from the measures taken.