What good is a future made in Australia if we can’t afford to actually make anything?

That’s the situation many businesses are facing as they deal with unsustainable energy price increases.

Energy costs are crippling businesses across NSW, and for too long, we’ve been forced to accept an outdated system that leaves major energy users paying far more than they should. 

These businesses, especially the larger ones, provide our economy with both tax dollars, jobs and are at the heart of many regional communities.

Yet high energy prices could well be a community killer. 

Every day, I hear from business owners struggling with soaring energy prices, some paying double what their competitors in other states are charged.

Manufacturing plants, cold storage facilities, data centres—these businesses are the backbone of our economy, but they are being pushed to the brink by costs that simply don’t add up.

Take Morgan Engineering, a 50-year-old business in Singleton that employs 120 people, including 30 apprentices.

They manufacture and repair parts for the mining industry and operate 24/7 across five sites. 

Their energy bill is already between $250,000 and $300,000 a year, and they are facing even higher costs due to the price of connecting renewable energy to the grid.

If prices continue to rise, Morgan Engineering will be forced to make tough decisions—cutting apprenticeships, reviewing their entire training program, and reducing their contributions to community services.

It’s not that we don’t have enough energy in NSW. We’ve got plenty of natural resources, especially gas. Yet projects like Narrabri have been paralysed for years by political indecisiveness. 

The problem is the way our market operates. Complex regulations, excessive network charges, and a lack of competitive pressure mean that large businesses are paying well above a fair rate for electricity.

Energy costs have been among the top three concerns for businesses since mid-2023, according to our Business Conditions Survey.

When businesses pay too much for energy, they have no choice but to pass those costs onto consumers, cut jobs, or even shut down operations entirely. 

We are already seeing manufacturers consider moving interstate or offshore, not because they want to leave NSW, but because they can’t afford to stay.

For example, another one of our members is a Defence manufacturer with locations on the NSW mid-north coast and the US. 

They say “if we compare the cost of energy here to the US, we pay about 12 cents a kilowatt hour here compared to 8 cents in the US. That goes straight to our bottom line.” 

Across the economy, this energy cost translates to hundreds of millions of dollars less that businesses have to invest and innovate within our state. 

And with US President Donald Trump promising to further drive down both company tax rates and energy prices, it makes NSW seem way too expensive. 

When a global company is making a decision on which country to set up a new manufacturing facility and invest in, would we even make the short list?

Spiralling cost isn’t just a business problem—it’s a jobs problem, an investment problem and a competitiveness problem. 

Business NSW is calling for immediate reform. We urge the NSW Government, in partnership with the Commonwealth and other states, to take additional steps to cover up to 10% of the cost of transmission infrastructure build-out to support Renewable Energy Zones, removing those costs from user bills.

The NSW and federal government must also unlock restrictions on gas exploration and streamline approvals to increase domestic supply and lower prices. 

If the government wants to accelerate the transition to meet their set targets and provide businesses and the people of NSW with reliable, affordable energy, the selected Renewable Energy Zone (REZ) generation projects should be considered for Critical State Significance Infrastructure (CSSI).

While early outcomes from generation auctions under the NSW Electricity Infrastructure Roadmap have been encouraging, the slow progress and rising costs of transmission projects under both the Roadmap and the AEMO Integrated System Plan are troubling and already costing businesses. 

Recent findings show that small businesses in NSW with an annual consumption of 40 MWh could pay up to $7,716 more due to three-year transmission delays—representing 23% higher bills than if transmission was delivered on time.

A future made in Australia hangs in the balance, and the next six months are key. 
Business NSW sees a greater role for government (both state and Commonwealth) in shouldering some of the costs of transmission infrastructure development.

The best solution for now and the medium term is a combination of gas and smart renewables – just like with cars, we need a hybrid model – and we must stop fiddling while our core strategic industries suffer.

Our businesses, our economy, and our future depend on getting this right. 
If we fail to act, NSW risks losing businesses, jobs, and investment to states that have got their energy market under control.

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