Soaring energy prices, driven by growing gas exports are putting jobs at risk and "politics-driven energy policies" are making the situation worse, Australia's peak business lobby group has warned.
Energy pricing and reliability is becoming a key risk for Australian business, a new report from Australian Industry Group report says, with more than half of the 285 private sector CEOs surveyed saying they expect prices to rise this year.
AiGroup CEO Innes Willox said the report is new evidence that rising energy prices are exposing businesses new risks "and may see Australia losing jobs and business activities offshore".
The report, "Energy Shock: No gas, no power, no future?" points to rising gas exports, the closure of ageing power stations, restrictions on onshore gas development and surging electricity demand as drivers of recent hikes in power prices.
And Mr Willox said current political debate is not helping.
"Politics-driven energy policies are making a bad situation worse," he said.
"This includes decisions to put gas development on hold in NSW, Victoria and the Northern Territory, partisan warfare on energy and climate at the Federal level, and entirely uncoordinated State renewable energy targets."
The business lobby group says an increase in gas development, moves to meet Australia's existing federal Renewable Energy Target, and establishing coherent national energy and climate policies are required to bring down prices and keep jobs onshore.
AiGroup says businesses could end up paying up to an extra $8.7 billion a year as they renew energy contracts at higher prices, while household costs could go up by $3.6 billion a year.
Energy-intensive manufacturers - such as those involved metals production, food, and basic chemicals - would be particularly hard-hit, paying up to $4 billion a year more, the report says.
In 2016, just under 40 per cent of businesses were hit with price hikes while nine per cent saw prices go down.
Several businesses reported a doubling of energy prices last year, and others a 200 per cent increase.
Ai Group warned that rising energy costs in the National Electricity Market and East Coast Gas Market, combined with increased competition, had left some businesses on considering layoffs or questioning their viability, particularly in South Australia.
Mr Willox said achieving lower energy prices would not be easy.
"More available gas will help electricity, as will meeting the existing RET (Renewable Energy Target) and settling national coherent energy and climate policy reforms to ease transition and reward low-cost flexibility," he said.
Ai Group also said that additional renewable capacity under the RET would help reduce wholesale prices in the long-term.
The report comes a week after Bluescope Steel boss Paul O'Malley warned of an possible "energy catastrophe" if rising energy costs continue to increase pressure on already-stretched Australian manufacturers.
