Statement from Stephen Galilee, CEO NSW Minerals Council
The NSW Energy Minister’s coal price cap is a clumsy, politically-motivated market intervention designed in haste, with little or no consultation. The policy will have no meaningful impact on electricity prices, but will come at a significant economic cost.
For transparency, the Energy Minister must release all modelling and analysis undertaken to justify the policy. This should include details on the expected impact on NSW energy prices relating specifically to the NSW Government's coal price cap.
Extending the policy to coal producers not currently involved in domestic coal supply is a radical change of approach that highlights how extremely rushed this policy process has been.
On 21 December 2022 Premier Perrottet told NSW Parliament,
“It is the Government's intent that directions that are issued by the Minister for Energy will only apply to the producers of thermal coal who have supplied that coal domestically to New South Wales power generators during the past three years.”
Now, just weeks later, the Energy Minister has abandoned this, with a radical extension of his flawed price cap policy that creates further significant risks.
The NSW coal sector employs nearly 30,000 people and provides our state’s most valuable export commodity, by far. The sector relies on an efficient and sophisticated production, transport and logistics system, developed over decades. Forcing mines designed and approved for export to supply the domestic market will have significant impacts on existing supply chains and the transport system, pushing up costs and risks.
More broadly, the price cap policy undermines the reputation of NSW as an investment destination, and as trading partner and supplier to our critical export markets overseas. It will threaten future investment in NSW across the resources and energy sector, and more broadly.
NSW coal producers will continue to engage with NSW Government officials in the weeks ahead in an attempt to minimise the economic damage of this flawed policy.