How many firms have been driven under by the rising price of power?
Help wanted!
The crisis in the power supply has been deferred for several years after Hazelwood closed in 2017 and the head of AEMO at the time, pre Audrey Zibelman, warned that we were travelling with a very thin reserve to handle increasing demand and unscheduled outages.
In the event demand has not grown as anticipated despite population growth.
Surely this is a sign of undocumented deindustrialization as power intensive enterprises have closed completely or moved offshore .
To get a sense of the losses can readers please contribute examples in the comments.
It will help to have accurate information and preferably documentation to supplement anecdotes and hearsay.
For example the demise of the car industry can surely be attributed in part to the cost of power in addition to he obstruction of the trade unions
In South Australia a small plastic recycling enterprise closed with the loss of some 40 jobs, this is one of the few cases of closures specifically attributed to the rising power price,
How many smelters have closed?
Some years ago Anthony Pratt spent a billion or so to establish a plant in the US to get cheaper power. I now find a report from last year that he was just warming up!
The new Pratt Industries factory — the sixth of the last eight paper mills in the US built by the Australian billionaire — will produce 1500 tons of 100 per cent recycled paper every day, to be then made into cardboard boxes at nearby Pratt plants.
And so on.
In this report on the closure of Newcastle steelworks I can’t see power prices mentioned but I suspect they were a factor.
https://www.sei.org/wp-content/uploads/2021/06/closure-of-steelworks-in-newcastle.pdf
It’s very dispersed, which makes it hard to document.
Small businesses like cafes and restaurants are very hard hit, because they use a lot of energy in food and drink preparation and storage.
Simultaneously, cash strapped punters are deleting the $5 coffee and the restaurant meal or takeaway as they await their next energy bills.
It is frightening to think that those in charge don’t realise how badly they are savaging the economy and the businesses and families that comprise it with their fairyland policies.
I expect that a hefty salary plus perks helps.
A prior employer has been struggling under increased power prices. When they can’t get reliable power it’s all over for them. Electroplating company, previously heavily involved in the car industry and survived the loss of that by the skin of their teeth.
Once a industry like that goes it’s not coming back. Not just the expertise to get the quality of product, but the expense to get it running.
Bluey
May 30, 2024 8:24 pm
That is a major factor of course, but also that the sapping of will to try again plays a part for many people.
Qenos has gone bust. They were a plastics manufacturer using gas which is now too expensive. I assume it will all come from overseas now
Gas is far more important to industry than households. The discovery of Bass Strait gas was central to Victoria’s development. Australia is particularly exposed because low cost energy was a major competitive advantage for the country for so long. Unless China rights the ship at some point things will be much less rosy over the next 20 years as as high cost, low productivity country in an increasingly global world. Expect to see more statements like those from Cadbury going forward.
Have a look at the downstream losses among the smaller businesses that support major operations.
https://www.swinburne.edu.au/news/2016/10/collapse-of-australian-car-manufacturing-industry/
The destruction of small workshops and hard industries started with Whitlam. I used to go to the auctions. Magnificent machines going for a song, often just the cost of moving it.
Whatever happened to the metal spinning workshops. I saw this as a proxy measure of deindustrialisation.
A mate was saying that the expertise has gone. You need a bloke over 70 years old and they can now command their own money and conditions. I guess that’s a plus
Small business and small farms are todays kulaks.
Obviously the regime cant herd them into cattle trucks and send them to siberia, but eviscerate them with red tape, green tape, pandemics, lockdowns, toxic vaccine mandates, inflation, high power prices and the underlying fascist apparatus slowly crystallises into view.
Rafe, just a short story to illustrate your point:
I took delivery of three premade bookshelves a little while ago. Well priced, just under $2k which I thought a very good balance between price and quality. Reasonably well made, solid construction, and definitely not cheap rubbish. Not flash, just workmanlike.
They came in cardboard and bubble wrap which I thought was excellent packaging. No apparent damage to packing or product.
Made in China.
WTF?!
Bookcases made in a factory 10,000 km away via Sydney to Barcaldine and able to complete price and quality wise with Australian product?
This is absurd!
Are we no longer able to make even bookcases in this country at a reasonable price?
Johnjjj
May 31, 2024 1:29 pm
You mentioned metal spinning,
I like watching Indian and Pakistani manufacturing and repair videos.
What those guys can achieve is simply remarkable.
I sometimes cringe watching them in sandals handling red hot or even molten metal.
How can they do it and we can’t?
Power supplies are critical. Politicians have stuffed it and do not seem to be able to fix it.
So Australia is on the way to being a mendicant nation.
Those industries which remain are under attack most weeks – mining and agriculture. AS the greenies and lefties chip them away, we will be forced to become a satellite of China, and rediscover old fashioned self-sufficiency if we are lucky enough to have a bit of land to do that on.
Some of these comments echo the hidden cost of losing the skills plus the strategic value of such in case of supply line disruptions
Agriculture for example imports most of its inputs
I suggest we are also losing the ability to innovate which is associated with hands on applications
At one stage it was suggested that USA had far too many legal people and not enough engineers
The Asian tigers have learned to make things , we have learned to throw them away
It never ceases to amaze me how people can rave on about climate change and then throw stuff away which is fixable
Another problem , it is cheaper to discard than fix
The national civic council had been on about this loss of industry for years so
trawl thru their archives for examples
A proposed urea plant at Wallumbilla ( Qld ) failed to eventuate due to the cost of energy
The USA at one stage provided gas at well below export parity to give their domestic producers a competitive advantage
Is Australia that smart???