31 October, 2017
Courtesy of the Australian
GFG Alliance chairman Sanjeev Gupta says Australia has the highest power costs in the world when its high wholesale prices are combined with its huge volatility.
But the British billionaire industrialist, who has moved to Australia after buying the stricken Arrium business, including the Whyalla steel plant this year, has not called for government action.
He says a combined plan for renewables, pumped hydro in spent mining pits, batteries and managing demand from his power hungry plants can sustain his newly acquired business in the nation’s harsh manufacturing environment.
“Over the last year, energy prices have doubled and continue to remain high and, apart from the price increase, the volatility of prices is intense, so at times we end up paying hundreds of dollars per megawatt hour,” Mr Gupta told the International Mining and Resources Conference in Melbourne today.
“It makes Australia the highest cost energy environment in the world.”
He said the price hikes were being driven by the pace of new wind and solar not matching the amount of coal-fired power exiting the system and by intermittency issues with renewables.
“We still have a very long way to go before renewables will replace the fossil fuel mix and a lot of work to do in terms of how that can be a stable and consistent supplier of energy,” Mr Gupta said.
The company, through its recent acquisition of a stake in Ross Garnaut’s Zen Energy, is focusing on a mix of renewable sources, storage and energy demand management.
“We believe we have the making of a renewable solution in terms of resolving the transition from fossil fuels to renewable energy,” he said.
GFG — which is owned by Mr Gupta’s Liberty House and his father’s SIMEC — is working on what it says is a 1000MW green plan in South Australia that it will then role out to other states, like New South Wales and Victoria where it has plants that make steel from scrap.
Mr Gupta said that in both Australia and Britain, energy prices had gotten out of control and were threatening industry.
“Through the liberation of industry, moving into the new generation of renewable energy at a low cost on a dispatchable basis, we feel will give us a foundation for the next generation to have sustainable industry.”