Thursday 18 August 2011

Consumers cut back as power price climbs

Age
15 August 2011, Page: 3

RISING electricity prices and a new awareness of ways to cut use have slashed consumer demand. Ausgrid energy efficiency specialist Paul Myors said: "We have seen consumption falling by around 2% a year for average household electricity use over the past four years. That goes against the long-term trend of a steady rise. "It could be the global financial crisis and rising tariffs is a factor. We are seeing the impact of energy efficiency", he said, pointing to the move away from electric hot water systems, previously the main user of electricity in the home.

The fall is expected to lead the national electricity market body, the Australian Electricity Market Operator, to forecast an overall decline of 5 to 6% in demand in the next decade the first drop in living memory. Prices rose as much as 13% on July 1 to fund $14.4 billion of spending on the electricity system but there has been criticism that NSW government owned companies such as Ausgrid and Endeavour Energy have been investing unnecessarily in their networks.

Household electricity prices are to rise by up to 17% more from mid-next year and up to 25% a year later. The proposed carbon tax will push household prices up further, although the federal government has promised to offset this for some households. Even with average household usage falling, demand is still rising at peak times in midsummer and midwinter, forcing upgrades to the power network.

The 5% cut in forecast demand is expected to push the need for new power stations back to 2020. No baseload power stations, which operate 24 hours a day, have been built in NSW since the 1980s, although gas-fired power stations have been built. The government is examining measures such as cutting the reliability of the network, which would leave households more exposed to blackouts.

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