The closure of cheap and reliable coal-fired generators and the shift to gas-peaking plants has left South Australia more vulnerable to energy price shocks than any other state in Australia.

The price of gas has nearly tripled in the past few years and that has meant that the fundamentals of where we get our energy from has increased substantially.

The Australian Hotels Association (South Australia) represents and protects the commercial interests of more than 630 hoteliers throughout South Australia. AHA SA members range from small country pubs to five-star hotels and resorts.

At a glance: 

• The shift to gas-peaking plants has left South Australia more vulnerable to energy price shocks than any other state.
• Choice Energy partnered with AHA SA to secure a collective energy procurement tender comprised of 47 hotels.
• Choice Energy has saved Australia Hotels Association (South Australia) more than $2 million over two years.

“The AHA SA understands the increasing costs on power to the hotel industry, along with many other parts of business which is creating a lot of pressure for hotels to be profitable and viable,” said AHA SA Branch Manager, Lucy Randall.

“We are delighted to have the support of corporate partners such as Choice Energy who are able to provide a range of solutions to assist on reducing these cost burdens."

“We would encourage all of the South Australian hotel industry to investigate the cost of their utilities and seek opinions on how these may be managed more affectively.”

Founded in 2013 by Christopher Dean and Alan Gill, Choice Energy services all Australian states and territories, and has established an enviable track record of helping commercial businesses to substantially reduce their bills through group buying and, where appropriate, switching to solar.

The company’s rapid growth was recognised when Choice Energy won the 2018 Smart Company Smart50 Award.

Choice Energy partnered with AHA SA to secure a collective energy procurement tender comprised of 47 hotels. The tender comprised 29,000,000 kWh of annual consumption and over $8.4m of energy spend.

“Our offering was $377,000 cheaper than a competing offer from an energy and the contract secured was 15% cheaper than if secured outside of a group buying arrangement,” said Mr Dean.

By arranging independent metering and monitoring for the group, AHA SA member hotels have also levered sunk cost and can now benefit from network tariff reviews, demand reviews and tackle their power factor costs. As a result of the group tender, AHA SA member hotels saved more than $2 million over two years, when compared to their previous contract.

“The AHA SA is a compelling case that has led other businesses to get in touch and see how we can save money for their business,” said Dean.

“We don't envision this situation for Australians will get better any time soon, with no unified plan on how we're going to make up the persistent shortfall in power generation.”

The Federal Government's tentative steps towards reregulating the retail energy market have seen power prices rise and competitive pressure between rival suppliers’ ease.

“Worst off is expected to be South Australia, which already has among the highest power prices in the world,” said Mr Dean.

“The state’s renewable energy policies mean it relies on more than 50 per cent of gas generation to power homes and industry."

“We see this in a number of businesses who come to us for help after being taken advantage of and left in the dark. The performance of the retail energy market in supporting customers facing payment difficulty remains worrying."

“The need for consumer trust and confidence has never been more important than it is now,” said Mr Dean.

Click here to visit Choice Energy

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