South Australian blackout costs business $367m, fears summer outages on way, lobby group says
South Australia’s state-wide blackout in September cost businesses $367 million, according to the state’s peak business lobby.
- Median cost of the blackout on SA businesses was $5,000
- Business SA concerned about further blackout over summer
- Lobby group wants PM and premiers to listen to chief scientist about energy sector
Business SA’s survey found almost a third of the cost was borne by four big businesses — Arrium, Nyrstar, BHP Billiton and Oz Minerals — when storms swept across the state and caused five system faults across the electricity network.
The blackout lasted from a number of hours in some areas to several days in other regions including the Eyre Peninsula, where businesses’ median costs associated to the event was about $10,000.
Business SA’s Anthony Penney said the result could have been far worse.
“The median cost for all businesses including the loss of production, trading, wages paid even though they weren’t operational was $5,000,” he said.
Mr Penney said the blackout happened at 4:00pm but cost to businesses would have been “significantly higher” if it had of been earlier in the day.
The group surveyed about 200 businesses to gain information about the impacts of the blackouts.
It found the blackout cost to Arrium, Nyrstar, BHP Billiton and Oz Minerals was about $115 million.
It also found only 37 per cent of businesses had business interruption insurance and of those businesses, more than half were not covered for any costs associated with the blackout.
Only 12 per cent of businesses had a back-up generator.
Summer blackout concerns for business
Business SA said it was deeply worried by the prospect of further blackouts over the coming months.
“Business SA and the broader business community have serious concerns that come this summer if there are consecutive days of extreme temperatures in Victoria and South Australia, that is going to place additional pressure on the interconnector, on the system and that we’re going to have rolling brown outs,” Mr Penney said.
He has called upon the South Australian Government and the Australian Energy Market Operator (AEMO) to make clear what plans are in place to guarantee supply.
“The market operator has indicated that there are reserve shortfalls come this summer but that there are plans in place to ensure there won’t be any disruptions,” he said.
“Business SA has called on Government for transparency and assurances that rolling brown outs won’t cause disruption and further cost to business.
“Business is lacking confidence. Confidence in investment, confidence in reliability and security. Perception becomes reality.
“We need to be communicating that things are being done to address this situation.”