Have we been saved from higher electricity prices?
Is the National Energy Guarantee (NEG) a “game changer” as the Prime Minister said last week? Will we see significant reductions in our electricity bills? Will consumer-funded subsidies of renewables end in the near future? The answers are no, no and no.
In 2016, 21 million Renewable Energy Certificates generated by wind and solar farms (each certificate equals 1 megawatt of renewable power) had to be purchased, by law, by Australian electricity retailers. The cost is passed on to consumers via their electricity bills.
In 2018, over 26 million certificates will be issued. This will keep rising each year until 2020 when it reaches a peak of 33 million certificates. They will then be capped at this level until 2030.
Each certificate currently costs the retailer $80. This is the amount by which renewable energy is subsidised.
This continuing ‘energy tax’ on Australian consumers will equate to a staggering $20 to $30 billion between now and 2030 (assuming certificates still cost between $50 and $80), transferred from households and businesses to owners of wind and solar farms.
If the government thinks a $100 annual reduction in bills from 2020 and a movie ticket for those who turn off their air conditioners on hot days is a vote winner, they deserve to be removed from Canberra’s power grid now.
What electricity consumers need, both households and businesses, is a substantial reduction in electricity prices.
The problem with the NEG, if it is agreed by Labor, is that once in government Labor only have to tweak its settings to achieve their stated goal of 50 per cent renewables. That means even higher prices.
I am calling on the government to stop playing around with half measures and to get its energy policy right. It should immediately abolish subsidies for any wind or solar farm not already approved by the Clean Energy Regulator, and end subsidies for existing generators by 2020. This is the only way to ensure our electricity bills fall by a meaningful amount.
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