Power at the margin

A power policy is effectively an industrial policy. To unlock growth, it remains critical that an export-oriented industrial policy that is adequately supported by an efficient, market-oriented power regime is shaped. Over the next 12 months, to stimulate sustainable growth, the current power infrastructure must be operated efficiently and with market-oriented pricing rather than arbitrary cost-plus mechanisms. It is important that competition provides an opportunity to buyers and sellers rather than creating walled gardens and espousing more inefficiency in the process. The current electricity pricing structure has stifled industrial expansion, with high tariffs pushing businesses toward on-grid and off-grid solar. However, the impact is restricted at best, with a transition of roughly 300MW of industrial use from the grid, to behind-the-meter solar. Industrial growth cannot be supported solely by solar energy, and an efficient grid is required to power it. This requires that the tariff is rationalised by trimming excess costs that have been loaded onto it and by pricing the same at the margin rather than through arbitrary cost-plus mechanisms.