The NSW Government has fulfilled its pledge to even the playing field among coal companies as part of the Australian Government‘s coal price cap.
Treasurer and Minister for Energy Matt Kean stated that new guidelines would require both domestic and export-focused coal businesses to offer cheaper coal to NSW power plants.
“In response to soaring coal prices caused by the war in Ukraine, the Albanese Government asked NSW to introduce a coal price cap to put downward pressure on electricity prices,” Minister Kean said.
As a result of the efforts, according to Minister Kean, federal Treasury data shows that future electricity costs in NSW have been reduced by 41% since the price limitations were established.
Kean described this as a modest request from coal producers, pointing out that Newcastle alone shipped over $61 billion in coal last year.
Where possible, coal mines will be required to provide power stations with the amount of coal they have supplied in the past, and export-focused mines will be required to provide additional coal needed to meet any difference,” Minister Kean said.
Minister Kean stated that export-oriented coal mines now covered by the increased guidelines would be required to offer no more than 5% of their output.
These guidelines do not require any coal mine to breach an existing contract, even evergreen contracts to avoid jeopardising long-standing international economic relationships.
Coal suppliers can apply to the Australian Energy Regulator for a higher price ceiling under the national Energy Price Relief Plan if their production costs exceed the $125 per tonne coal cap.
