So says Woolies:
Woolworths chief executive Brad Banducci has warned that rising energy costs will eventually force the food giant to increase grocery prices.
Mr Banducci, speaking at a business forum in Melbourne on Tuesday, said while Woolworths was trying a range of strategies to cut energy costs, including installing more energy efficient lighting and refrigeration, energy cost increases would more than outweigh these savings.
“We manage what we can manage with energy efficiency. But given the cost increases that are coming through right now, we are trying to outrun a bear, but I am not sure we can,” Mr Banducci said.
“We will have to in some way, very cautiously and carefully, pass those through to our customers, unfortunately.”
The problem is very easily solved. It is simply the price of gas. Here’s the chart (the green arrow is the carbon price abolition, red is Curtis Island LNG startups):
It is gas that sets the marginal cost in the National Electricity Market owing to where it sits in the wholesale electricity market bid stack. See Australian Energy Market Operator description below:
When the price of gas is high so is the price of electricity.
We need cheaper gas. Then all of the problems in the energy market will go away at once and we’ll have time to decarbonise the network with longer term battery and other storage options to stabilise renewables. This was always the national plan, such as it was, that gas would be the transitional fuel as we move steadily from coal power to renewables. The only thing that has gone wrong with it is an east coast gas cartel has formed around Curtis Island LNG and is gouging the life out of everyone as it sends all of the gas overseas.
Energy is a critical national market that cannot be allowed to fail in this way. We need third party gas export bans, domestic reservation and “use it or lose it” rules for the gas market.
Not acting to fix this urgently is criminal government negligence.
