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QAL's whopping power price hike revealed

QUEENSLAND Alumina Limited's electricity bill has risen by 90% in the past decade, even though they're using the same amount of power.

Russian company RUSAL, which owns 20% of QAL, has labelled the nation's electricity market as "dysfunctional", calling for a shake-up to power regulators and providers.

Aerial View of Queensland Alumina Limited (QAL) Gladstone.

Photo Brenda Strong / The Observer
Aerial View of Queensland Alumina Limited (QAL) Gladstone. Photo Brenda Strong / The Observer Brenda Strong GLA040712VIEW

In a submission to Alan Finkel's independent electricity market review, RUSAL detailed its electricity price woes, including its 90% power price hike in 10 years.

RUSAL Australia chairman John Hannagan called for the State Government to freeze its renewable energy at 2017 levels and crack down on the state's biggest electricity generators.

"Over the last decade QAL has taken the same base load, generated by the same power stations using essentially the same transmission network, but our delivered power price has increased by more than 90% - this experience is typical for electricity consumers in Queensland," Mr Hannagan said in the submission.

QAL uses 90MWh of power, in comparison, 150MWh is enough electricity for every home in the Gold Coast.

Queensland power prices will again increase significantly in 2017 - RUSAL Australia chairman John Hannagan

Mr Hannagan also criticised the bidding behaviour from Queensland's largest electricity generators.

He's concerned the power price increases will soon be felt on the electricity bills delivered to Australians.

"The bidding behaviour of state-owned generators in early 2017 have shown little regard for the needs of energy-intensive industry to (retain) international competitiveness and maintain job security - Queensland power prices will again increase significantly in 2017," he said.

His concerns of the bidding behaviour were echoed by Rio Tinto, 80% owner of QAL, owner of Yarwun's alumina refinery and part owner of Boyne Smelter Limited.

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In its submission Rio Tinto said there was a breakdown in competition from the electricity market due to a concentration of market power among the biggest providers.

"It is imperative that near-term changes to the NEM to lower emissions do not increase the cost of electricity in Australia and maintain the reliability of supply," Rio Tinto said in its submission.

RUSAL says the electricity market will be under even more pressure, as the Queensland Government pushes more renewables into the grid in a bid to meet its 50% target by 2030.

QAL has had an electricity price increase by 90% in ten years.
QAL has had an electricity price increase by 90% in ten years. Paul Braven GLA160216QAL

"For these reasons RUSAL Australia believes that the independent review must include recommendations that ensure renewable generation is better integrated into the NEM bidding and dispatch system to help ensure stable system supply and stable electricity market operations can be maintained," Rusal said.

"Alumina refining is an energy-intensive industry that relies on internationally competitive local supplies of energy and the key competitive advantage of QAL for nearly 50 years has been local inputs of coal, gas and electricity."

Gladstone Industry Leadership Group chief executive officer Patrick Hastings said high electricity prices were one of the biggest challenges facing Gladstone's major industries.

"All of our assets in Gladstone are high electricity users," he said.

"Increases to prices make it more difficult to do businesses internationally."

Mr Hastings said the 20-year-old National Electricity Market wasn't capable of dealing with the 21st century's mix of power generation, including renewable energy.

The independent review into the national electricity market will use the more than 360 submissions to provide the Federal Government with a national reform blueprint.

The final review is expected to be presented to the Australian Government by mid-2017.

TIMELINE | SEE HOW BOYNE SMELTER'S POWER CRISIS HAS UNFOLDED

Topics:  gladstoneindustry mining queensland alumina limited



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