It's been held up as an oasis of cheap power prices and a model for the transition away from coal but in Western Australia there are warnings the electricity market is in trouble. Business customers not shielded by state subsidies that keep household power prices artificially low are reporting eye-watering increases in costs.
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00:00In the food production industry, opening up new markets is almost never easy.
00:09Neil Handerside is a lifelong strawberry grower who's built a fruit processing and cafe business as well.
00:15It's power-hungry work.
00:17Look, everything runs on electricity, so yeah, we just need to have that reliable source of reasonably priced electricity.
00:24Lately, the cost of that power has been rising rapidly.
00:27They've gone through the roof in the last 18 months. Thousands, thousands more a month.
00:33He's not alone. Under WA's energy rules, the smallest users such as households are shielded from the full cost of providing power by state government subsidies,
00:42which leaves most business customers fully exposed to the whims of the market.
00:47And according to experts, prices in the market have been soaring.
00:51There's no one not affected. From our biggest client to our smallest, we do not see decreases anymore, savings.
00:59At the heart of the upheaval is the rising cost of generating electricity.
01:03But significant pressure is also coming from services and new infrastructure such as batteries needed to back up the power system.
01:10So the energy market has changed fundamentally, especially in the last two years.
01:14We've seen energy costs increase, raw energy costs increase by around 120, 130%.
01:21Amid plans by the government to close its remaining coal plants by 2029, the Premier insists things are on track.
01:28Western Australia will be the only state in the country that will be out of coal by 2030.
01:33In order to get out of coal by the end of the decade, the WA government faces a huge challenge.
01:39Not only does it have to build enough capacity to replace that coal, it also has to meet a forecast increase in demand.
01:46The problem is, it's so far built nowhere near enough.
01:50If you look at their transition plan, there's not enough generation in the system, whether you want it in renewables or gas.
01:56Back at the farm, Neil Handeside is bracing for more power paying ahead.
02:00There's certainly no cheaper power coming our way any time soon, if ever.
02:04Reaping the costs of a troubled harvest.