Boyne Smelters threatened by 35% electricity price hike in Queensland

Queensland businesses are being hit with multi-million dollar price increases in electricity costs with some putting the hikes at 80%.

A multi-million dollar price increase in electricity cost has hit a number of businesses in Queensland including Gladstone's Boyne Smelters. The revelation came after a request by Federal Energy Minister Josh Frydenberg for an investigation into Queensland's generators over possible price overcharging.

Gladstone's Boyne Smelters said that till date they have till date curtailed 18,000 tonnes of aluminium capacity due to its failure to get affordable electricity rate. The higher electricity rate has cost them more than $40million so far and it is likely to cross $100million for the year.

Mining giant Glencore was affected by a 35% increase threatening the future of its north Queensland operations and Sun Metals complained of a five-fold increase in the rates.  Sun Metals have recently announced the development of its own solar farm to manage costs.

Boyne Smelters General Manager operations Joe Rea said it had no plans to return to full production unless it gets access to an affordable rate.

"There has been no firm indication that wholesale electricity prices in Queensland will return to a sustainable level for our smelter in the near to midterm,'' he said.

"Queensland needs a regulatory framework that makes electricity affordable again. We look forward to the ACCC reviewing the outcomes of the inquiry into electricity supply and pricing,'' he added.

Energy Minister Mark Bailey has admitted the fact that the recent price rises were high but he accused a broken national market for it. According to him businesses in other states were paying significantly higher than those in Queensland.

{googleAdsense}

"We have the lowest wholesale price in the nation and it's projected to be the lowest for the next three years,'' Mr Bailey said.

The Energy Users Association chief executive Andrew Richards said companies were being forced to cut jobs because of the skyrocketing electricity costs. He said an achievable clean energy target from the Federal Government would encourage companies to invest in Queensland and make the market more competitive.