Power prices still a worry

BlueScope Steel’s concern over energy plan failure

BLUESCOPE Steel has flagged continuing concern over power prices and reliability following the failure of the Federal Government’s national energy guarantee.

“We were disappointed that the Australian Federal Government chose not to proceed with the planned National Energy Guarantee,” BlueScope managing director Mark Vassella (pictured) told the steelmaker’s annual general meeting in Sydney yesterday.

“We thought this policy had real potential to deliver less volatile electricity prices and greater reliability of supply, while also cutting emissions.”

Mr Vassella said rising gas and power prices, and supply issues, would hamper the competitiveness of BlueScope’s Australian manufacturing.

“The company’s objective is to seek policy that ensures energy supplies are reliable, affordable and contribute to meeting Australia’s Paris commitments,” Mr Vassella said.

“We also seek policy that encourages global reductions in emissions from the steel industry, and does not contribute to carbon leakage, in which steel production shifts to other jurisdictions with no environmental benefit.”

The national energy guarantee was formulated this year but abandoned amid opposition from conservative MPs shortly before Malcolm Turnbull was ousted as Prime Minister by his own party.

Opposition leader Bill Shorten said this week that Labor would revive the policy if elected next year.

Mr Vassella said BlueScope was heartened that government was still seeking to improve reliability.

Mr Vassella also said domestic sales volumes remained robust driven by strength in non-residential and residential construction, with the latter focused on alterations and additions, and new detached homes.

WE THOUGHT THIS POLICY HAD REAL POTENTIAL TO DELIVER LESS VOLATILE ELECTRICITY PRICES AND GREATER RELIABILITY OF SUPPLY, WHILE ALSO CUTTING EMISSIONS

BLUESCOPE STEEL MANAGING DIRECTOR, MARK VASSELLA