South Australia’s Wind Power Obsession Sends Business Power Costs Out of this World

As SA’s vapid Premier, Jay Weatherill purrs about his $150 million Elon Musk mega-battery that will power his economic backwater for all of four minuteswhen the wind stops blowingor blows too hard – meanwhile, back on earth, South Australian businesses have watched their power costs almost triple in three years.

Large-scale wind and rooftop solar dominates SA’s power supply – sunshine and breezes permitting, of course; and let’s face it, Weatherill & Co have been shouting that fact from those rooftops for a decade or more. So, it’s pretty hard to pin the blame on something else for SA’s rocketing retail power prices.

As pointed out in this post – Guilty: Subsidised Wind & Solar Drive Australia’s Rocketing Retail Power Prices – the villains are pretty easily identified: subsidised wind and solar.

Not that the eco-zealots at Australia’s ABC will ever make that obvious connection, but at least they are now reporting on how power prices crush businesses, like country hotels.

High energy prices increase pressure on country hotels
ABC News
South East SA
Lucy Robinson
29 November 2017

Regional hotels and clubs are struggling to operate under South Australia’s soaring energy prices, with costs a contributing factor in some recent closures, according to industry members.

General manager of the Hotels Associations Australia SA branch, Ian Horne, said rising prices had hit hotels hard in all areas of the state.

“It’s the biggest single debilitating impact on the industry in the last two and a half years,” he said.

“We’ve seen power costs increase not 10 per cent or 20 per cent but 100-plus per cent in a couple of years.”

But he said the impact was magnified in country areas, where hotels were already under more pressure.

“The bread and butter for your average regional hotel is the local community,” he said.

“They don’t seem to be able to grow their businesses because population growth is stagnant.

“At the end of the day it squeezes the capacity of the business to keep being able to pay its bills.”

Warm beer not an option

Mr Horne said while there were some measures hotels could take to become more energy efficient, there was a limit to how much they could cut back their usage and stay viable.

“As soon as you say ‘Well we’ll turn the air conditioning off’, that’s a great way to make sure your customers don’t come back,” he said.

“Or ‘Let’s sell warm beer’ or ‘Let’s let the ice-cream melt’.

“They have no choice and that, I think, is a significant contributor to the increasing financial stress.”

The Kincraig Hotel at Naracoorte, in south-east South Australia, recently closed its doors as administrators were called in to take control of the company.

Director Peter Symonds said energy costs were a significant factor in the decision, with his power bill flagged to increase by 123 per cent next year.

“We used agents to hunt down new power contracts for us and that was the best result they could come up with,” he said.

“We were going from about 7.5 cents a kilowatt hour to 17 cents.

“It would have put about $2,000–$2,500 a month on the power bill, and how do you cover that?

“That’s $500 or $600 extra a week you’ve got to find.

“I used to bloody dread opening the power bill.”

Hurting the hip pocket

Mr Symonds said he had been trying to keep the closure at bay for more than a year but the pressure of mounting bills, combined with dropping business, had become too great.

“We worked our wages back — we more or less halved the wage bill from the previous publicans there,” he said.

“It still wasn’t enough.

“Other hotels were being walked away from as well in town, so we’re just one in a list I think.”

General manager of the Mount Gambier RSL, Peter Zukauskas, said other financial pressures on the club had been compounded by the power bill recently increasing by more than $3,000 a month.

“The average power bill is between $7,000 and $8,000 a month and it’s now jumped to just over $11,000,” he said.

“It’s the largest bill that we actually get every month.

“When you calculate that over a 12 month period … that’s a lot to absorb.”

Small operators suffering

Hotel owner Guy Matthews, whose company runs hotels in Mount Gambier, Whyalla and Adelaide said current industry conditions were hard on small hotels.

“The hotel industry is going through a lot of changes with new licensing laws and various conditions that are cutting into our industry … so costings like electricity are very noticeable,” he said.

“If you’re in the big league you can withstand it. The small boys … they’re pulling their hair out at the moment.”

He said monthly power bills for his three Mt Gambier hotels were, on average, 27–29 per cent higher than last year, despite a switch from incandescent to the more energy-efficient LED lighting.

“It doesn’t take long to get to $100,000 a year just to supply electricity,” he said.

“Electricity has really just gone absolutely out of this world.”
ABC News

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Reblogged this on ajmarciniak and commented:
    As SA’s vapid Premier, Jay Weatherill purrs about his $150 million Elon Musk mega-battery that will power his economic backwater for all of four minutes – when the wind stops blowing – or blows too hard – meanwhile, back on earth, South Australian businesses have watched their power costs almost triple in three years.
    Large-scale wind and rooftop solar dominates SA’s power supply – sunshine and breezes permitting, of course; and let’s face it, Weatherill & Co have been shouting that fact from those rooftops for a decade or more. So, it’s pretty hard to pin the blame on something else for SA’s rocketing retail power prices.
    As pointed out in this post – Guilty: Subsidised Wind & Solar Drive Australia’s Rocketing Retail Power Prices – the villains are pretty easily identified: subsidised wind and solar.
    Not that the eco-zealots at Australia’s ABC will ever make that obvious connection, but at least they are now reporting on how power prices crush businesses, like country hotels.

  2. Terry Conn says:

    Good report from Lucy Robinson, employed by the ABC – what’s the bet she gets laid off next week!

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