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South Australian miners to buy electricity in bulk to cut power bill

11th June 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – A consortium of South Australian mining companies have awarded an eight-year supply contract to a renewable energy retailer, as part of their joint efforts to cut energy costs.

The South Australian Chamber of Mines and Energy (Sacome) in 2016 masterminded the consortium in the face of soaring energy costs and supply concerns, gaining approval from the Australian Competition and Consumer Commission (ACCC) to band together.

Sacome CEO Rebecca Knol said that the cross-sectoral collaboration delivered affordable power to some of South Australia’s largest energy users and underpinned the development of new supply for the collective benefit of state.

“Following the ACCC green light in May 2017, Sacome’s flagship joint-purchasing electricity group banded together to leverage their strength in numbers and bring down electricity prices for their businesses.

“The group’s approach to this complex commercial negotiation in a fast-changing electricity environment has been inspirational. The outcome is a credit to the stamina and commitment of our participating members who represent a diverse slice of South Australian business,” said Knol.

She noted that with electricity representing up to 40% of input costs for members of the group, the redistribution of these savings would flow through to new investment opportunities for the South Australian economy.

The agreement with renewable energy retailer Simec Zen Energy, part of Sanjeev Gupta’s GFG Alliance, is expected to deliver Sacome members with electricity at a price below what could be achieved through a standard market tender, and also allows the retailer to fast-track plans to replace the capacity lost when the Northern power station closed two years ago.

“This capacity will be a mix of generation assets suited to the new energy landscape, such as the Cultana solar power station and our other projects in the Upper Spencer Gulf,” said Gupta, who is chairperson of Simec Zen.

The ACCC, meanwhile, welcomed the supply agreement, with chairperson Rod Sims saying that the ACCC was pleased with Sacome’s successful efforts to sponsor new generation capacity in South Australia, and source a lower price for electricity for its members.

“New independent generation capacity is critical to improving competition and helping bring down electricity prices," Sims said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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