Fears the Port Kembla steelworks could fall victim to an “energy catastrophe” has sparked calls for action.
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BlueScope CEO Paul O’Malley this week said it was vital for the country to address energy security and costs.
Without any capacity to cater for the minimum levels of power demand – also known as “base load generation – Mr O’Malley said the country would be heading for an “energy catastrophe”.
He said energy supply shortages in South Australia last year led to damage to the blast furnace at Whyalla.
I am concerned about any threats to the production of steel and related products.
- Gordon Bradbery
A power hiccup like this at Port Kembla could be equally devastating, as could the rising prices an energy-hungry steelworks needs to pay.
If those prices rise too much, Mr O’Malley hinted it could make the Port Kembla steelworks unprofitable to run – which may mean its closure.
“The hip pocket to industry and to consumers is going to be substantial,” Mr O’Malley said.
“If we don't address cost and affordability, it will be very difficult to survive.”
These concerns have seen Wollongong Lord Mayor Gordon Bradbery write to NSW Energy Minister Don Harwin and his federal counterpart Josh Frydenberg, calling on them to work towards improving energy security.
“Another challenge to the future of the steel industry at Port Kembla and raw steel production is reflected in the recent threats to power supply and escalating costs,” Cr Bradbery wrote.
“As Lord Mayor of the City of Wollongong, I am concerned about any threats to the production of steel and related products, engineering and fabrication sectors in our city and the regional economy.”
Industry policy group Australian Power Project said governments needed to listen to the concerns of BlueScope’s CEO.
“The workers and the community of Port Kembla have done remarkably well to turn around the fortunes of their steelworks,” said Australian Power Project CEO Nathan Vass.
“They have tightened their belts and made their business more sustainable.
“But electricity is the one cost that is beyond the abilities of every business in Australia. Canberra needs to get behind Port Kembla and other regional communities which face their large employers being wiped out by spiralling energy prices.”
