Small businesses and major Border manufacturers are becoming less competitive and their operations less viable because of 'astronomic' power prices during peak summer periods.
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With two significant power generation plants likely to be offline until at least December, there is a "significant risk of insufficient supply" across the grid, which will likely lead to skyrocketing electricity prices.
Australia Industry Group's Tim Farrah, of Albury, said every year businesses struggled to operate over summer because the cost of running electricity was simply too high during peak periods.
He said last year some operations temporarily shut down production, because the cost of keeping machines powered was untenable.
Mr Farrah said insufficient power supply would see prices increase even more this year.
"We saw last year that Mars Petcare had to close... which is just one example of the real disruption this could cause to the local economy," he said.
"The cost of power has to be astronomical to stop production because the cost to businesses are enormous to shut equipment down and restart [and pay staff who aren't working]."
IN OTHER NEWS:
Production was halted at Mars Petcare Wodonga during the February heatwave.
At the time, Mars Petcare general manager Barry O'Sullivan said prices were set to jump to more than 1000 per cent of the company's usual rate
Mr Farrah said a year on, nothing had been done to ease the burden of high power prices and Victoria's insufficient power supply could exacerbate the already troubling situation.
"It hasn't been a tremendous year for business so businesses are more vulnerable in terms of viability," he said.
"It shows a complete lack of policy and a failure to solve the problem another year on."
Mr Farrah said the high cost of power made it harder for Border businesses to compete with international manufacturers.
"Because businesses can't absorb the cost, they need to put the price [of products] up," Mr Farrah said.
"Everyone is feeling the pinch with wages stagnating... as much as they might want to buy local sometimes they can't afford to.
"So businesses get the double whammy, power prices are up and sales numbers are down because they can't compete with imports.
"It's a quick trip to not being viable from there..."
Since their multi-day shutdown in February, Mars Petcare have turned to solar power in the hopes of mitigating the cost of high power prices.
The company have entered a power purchase agreement with the soon-to-be-completed Kiamal Solar Farm in Ouyen. Once finished, the farm will generate the equivalent of 100 per cent of Mars' electricity, allowing to offset their consumption both economically and environmentally.
Earlier this year a Mars Petcare spokeswoman said the company hoped the solar investment would mitigate some of the challenges brought about by the 'volatility of energy prices' and rising cost of manufacturing in Australia.
Mars is just one of many companies turning to renewable or alternative sources of power for, at least in part, financial reasons.
Howlong's Cool Off made inroads into solar power two years ago and this week Coles announced a similar power purchase agreement with three proposed solar farms in Wagga, Junee and Corowa.
Chief property and export officer at Coles, Thinus Keeve, told the Australia Financial Review the company had seen "significant increases in costs from an energy perspective" and that the deal was good for the company and the environment.
But investment in alternative energy sources tend to only offer long term returns, the Australia Industry Group's Tim Farrah said.
"The problem is smaller manufacturers don't have the financial capacity to make big investments when sometimes the return can be quite high but you might not get your money back for seven to ten years," he said.