This surge in prices is not because the demand for electricity in Australia has been unusually strong. Total electricity consumption has been little changed over the past decade as people and businesses have found efficiencies and the nature of production changed (Graph 12). Yet prices increased significantly. Global supply-side factors are part of the explanation, but so too are domestic supply-side factors.
No doubt the big players--multinational corporations and "production groups" in an intricate chain of subcontracting--have played a major role in this phenomenon. They have relocated production around the globe to more cost-efficient locations and prompted a worldwide expansion of trade in parts and semifinished goods as well as in final products. But increasingly, small businesses also are participating in global markets.