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Australian Energy Prices Will Continue to Surge?


Sunday, March 21st, 2010

Australian electricity prices, no matter where things go in the future, are set to continue for some time to come if the population wants to count on reliable electrical supply for its needs.

The major reason for the price increases is the cost of investing in the sector, which also continue to rise.

Demand for energy in Australia is expected to grow by close to 50 percent by 2030, and supply will have to grow with it if there is to a consistent supply to the people and businesses in need.

According to Martin Ferguson, the federal Minister for Resources, Energy and Tourism in Australia, the " ultimate challenge is to ensure we get the investment we need in networks and generation in the next decade to guarantee the high supply reliability the Australian community rightly expects."

Ferguson said Australians need to know the truth that prices over the last three years alone have surge by close to 35 percent, and that will probably continue on based on his assessment of the cost of investment in energy mentioned above for the country.

As far as the specific costs go, its related to the cost of capital to increase investment in Australian electricity networks, which is crucial to being sure the supply of electricity remains reliable in the years ahead.

The Australian government understands the possible fallout from all of this, but evidently say the increase in the price of electricity is unavoidable, and while it will cause hardship for a number of businesses and families in the country, it can no longer be put off.

Ferguson added there is a need for a minimum of $100 billion investment for electrical infrastructure over the next 10 years if the energy demands are to be met.

I'm not sure, but it sounds like he's using fear to justify spending a ton of money for, in some cases, dubious projects which may not be needed.

His continual reference to so-called climate change didn't make much sense in the light the alleged science behind it is fictional and to a large degree - a hoax.

Hopefully Australians will look closely at these assertions and see how deep the problems really are before giving their government another $100 billion to spend of their money.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: australia , australia energy , electrical infrastructure , electricity australia