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Australian Government Not Coming Clean on Real Energy Policy

Nigel Morris's picture
SolarBusinessServices
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  • Dec 2, 2013 4:00 pm GMT
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Australian Energy Policy

For goodness sake.

It’s almost 2014 and the best that our new Abbott led Government of Australia can come up with by way of an energy policy is a 7 page document loaded with out of date graphs, deceptive statements and frankly, a copy and paste of many of the policies that the preceding Government put in place.

The first page describes how electricity prices have risen a lot.  Groundbreaking news. It then launches into an out of date and deceptive statement about rising demand (which it’s not, demand is actually falling) and goes on to say “actually it’s a state issue, it’s not our fault, but we’ll work with them”. 

Page two predictably launches straight into a Carbon Tax assault. Intriguingly, the Prime Minister seems to be back flipping on his statements already about how much axing the Carbon Price will save.  On the 15th of October he said ‘When [the carbon tax repeal] bill is passed, Australian households will be better off to the tune of $550 a year.” However in this Fact Sheet, the number has been reduced by a staggering 60% to  “around $200 a year” (lower) for electricity and gas and in 2014/2015, a mere $70 a year beyond that.

$50 says that will never be on the front page of the Australian.

Page three and four rightly describe Networks costs as the major contributor to electricity costs and then goes on to explain that it’s a big country, the network is really old and in effect, justifies increased expenditure. There is scant attention paid to the real issue and that is, that in many jurisdictions these Government owned assets are allowed to make a return based on the value of the asset – so expanding them makes more money for the State Government.

In two recent cases in NSW, the State owned transmission owner Transgrid was forced to back pedal on massive network upgrades because “The latest data showed a solution to electricity growth and supply in the area is not required until the 2020s or later”. This was TransGrid’s statement, after unsuccessfully battling for several years to install the  $227 million, 330-kilo-volt line near Armidale. Transgrid also lost a very high profile case in similar circumstances in nearby Taree earlier this year after they were outed in an ABC documentary (Corridors of Power)about gold plating. Yet again, Transgrid insisted that one of two options were needed for Stroud to Taree: Option 1, which cost $278.8 million and Option 2 at $349 million. They lost that one too.

Nothing in our new Governments Fact Pack mentions these cases or the urgent need for overhaul of the regulations that allowed these projects to almost proceed.

Network and Transmission owners certainly do face a conundrum. If demand keeps falling, they have less kWh to recover their costs from – so they will have to put their charges up and under current regulations, are allowed to do so. They thus have virtually zero incentive to encourage reduced demand; and are in fact geared in the exact opposite direction.

Here’s a  true story about how one senior manager in a network company described it to me, recently. I had asked him what we could do collaboratively to continue to reduce demand but find a way to make money in a new way, so they could survive. He stared at me blankly, blinking for a minute. “We have a very clear strategy, it’s quite simple” he said. “We simply need to reduce the price of electricity sufficiently that demand starts to rise again, then we can spread the costs over more kWh and that’s it”. His answer was simply, use more electricity.

Now it starts to become clearer why the NSW Government may have reversed its ban on electric hot water systems only a  year or so back. And perhaps why Time Of Use pricing is essentially discouraged. And why the NSW Government set out on an unprecedented, calculated campaign to attack and discredit the solar industry in 2011.

Page five of the Federal Governments Fact Pack is dedicated to the Renewable Energy Target, Feed in Tariffs and Energy Efficiency Schemes. It deceptively describes the cost impact of the RET in 2012-2013 terms (any one told them that is in the past?) and belies the fact that the RET costs are reducing substantially and in fact also have a positive effect on the cost of electricity.

The document says “Most states and territories have introduced feed-in tariffs” and cite the fact that costs were bigger than expected in the case of  NSW. Well Prime Minister, that was 2011. Since then virtually every FIT in Australia has been cut or dramatically reduced and as recent Energex data shows there is a constant shedding of high value FIT customers to low value non FIT schemes as they move house or otherwise become in-eligible. Oh, and those nasty FIT’s added almost 3GW of capacity to Australia.

Energy Efficiency gets a little mention, but really only in the sense that it has a cost and little benefit; almost made out to be quirky, odd little programs.Poor energy efficiency.

Page six talks about the COAG reforms that have been going on for years and that have achieved virtually nothing, and again completely overlooks the fact that while ever the State budgets are reliant on revenues from  Coal Royalties, Generation, Transmission and Distribution of electricity there is no reason that anyone in COAG would suggest any need for change.

The last page waffles on about how you can save energy, use one of the websites to shop around and how they don’t expect prices to go up more than say 3% per annum in the next few years.

What a wasted opportunity.

The post Government not coming clean on real energy policy appeared first on Solar Business Services.

Photo Credit: Australia Energy Policy/shutterstock

Nigel Morris's picture
Thank Nigel for the Post!
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