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ACCC report issues stark warning: Coal and CSG are driving up electricity prices

Lock the Gate Alliance says the role of high-cost and damaging coal seam gas in driving up energy prices should sound the death knell of the controversial Narrabri CSG project in North West New South Wales.

The ACCC’s report from its Retail Electricity Price Inquiry released today found that changes in the costs of generation, in particular increases in the costs of gas and black coal has been a key factor in the increase in wholesale electricity prices.

The ACCC’s report reveals that for every $1/GJ rise in gas prices, the wholesale price of electricity rises by up to $11/MWh.

The report comes just a week after AI Group released a report arguing that the use of gas in the electricity system needs to shrink to make electricity more affordable.

Lock the Gate Alliance spokesperson Georgina Woods said:

"It’s clear from the ACCC report released today that a key solution to high electricity prices is less gas, and more renewable energy and storage.

"There’s no doubt that electricity price rises have been caused in large part by export LNG terminals in Queensland driving up domestic gas prices and more gas won’t solve the problem.

"We need to stop adding more high cost unconventional gas into the electricity market, and the Narrabri gas project will produce the most expensive gas in the east coast market.  

"Renewable and storage should be the priority for NSW, not the risky, costly Narrabri gas project that will jeopardise the groundwater of rural communities in the process.

"Australians should also take heed of the ACCC’s warning that coal fuel prices are also rising and that this too has played a role on wholesale electricity price rises.

"Old contracts to supply cheap coal to government-owned power stations are coming to an end. What’s going to happen to electricity prices when the power stations have to start buying coal at the export market price?

“We’ll be paying more than we need to for energy for as long as we shackle our electricity market to the volatile resources industry. We reckon it’s time Australia got fully behind renewable energy and storage to protect water and farmland and bring down power prices,” said Georgina Woods.

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