UNPREDICTABLE rising power costs are stifling business growth, but renewable energy in Bendigo could make a difference according to an industry figure.

Bendigo Manufacturing Group chair Mark Brennan said businesses would put budgets together, only to find electricity prices shoot outside the constraints.

He said electricity costs had risen to a huge degree, particularly in the last five years.

Read more: 'Things aren't getting any easier' - cost of living struggles

"It's directly affecting the business's bottom line and profitability," Mr Brennan said.

"It just stifles [a business ability to grow]. You have plans and you have visions for growth and they just get squashed because your power costs have been going through the roof."

Mr Brennan said penalties on business for exceeding the kilo-wattage of their peak demand were also killing industry. He said manufacturers were paying penalties for months on end, even if they only exceeded their limits for a matter of seconds.

He said the penalties were "unreasonable" - ostensibly intended for infrastructure, but in reality just going into power companies' pockets.

Read more: Looming bottleneck for green energy in Bendigo's abandoned mines

But Mr Brennan said a City of Greater Bendigo initiative to have the city fully reliant on renewable energy by 2036 could reduce power costs for industry and domestic users.

"If we can achieve that, potentially in the future beyond that we can be a net exporter of power, which would be fantastic," Mr Brennan said.

"Therefore we're reliant on creating our own destiny, and not relying on other government initiated."

Earlier:

A BENDIGO business's bottom line is hurting after power costs nearly quadrupled over the past eight years.

Keech Australia Garth Keech said the casting and foundry business paid about $110,000-$120,000 for power each month, compared to about $30,000 eight years ago.

The business designs, engineers and casts products, for industries such as mining, railway, engineering, agriculture and defence.

Read more: Power bills bite in Bendigo with complaints on the rise

In Mr Keech's words, "If you kick it, and it hurts, we can make it".

Mr Keech said the rise in power costs had eaten into the company's bottom line.

The company can't pass the rise in production costs on to its customers because it has to compete with the world market, he said.

Mr Keech said the company was one of probably two or three foundries left in Australia manufacturing the type of castings they do.

Read more: Hospitals baulk at rising power bills

He said the rising costs of power affected any business using power.

"The biggest issue as I understand it is the lack of supply, or the thought that there is going to be a lack of supply," Mr Keech said.

"Having gone to this privatised model where you have to hedge your bet and guess what the price is going to be, and buy electricity two or three years out in advance.

"Sometimes you buy it and then the price comes down, it makes life a bit more challenging."

Mr Keech said he would like to see planning from the government on how to address new power stations.

He made the comments during a visit from leader of the opposition Anthony Albanese to Keech Australia.

More to come.

Have you signed up to the Bendigo Advertiser's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in central Victoria.