Thursday, 13 September 2012

Queensland misses the target on energy prices

Clean Energy Council
5 Sep 2012

The Clean Energy Council has called for more collaboration to reduce electricity prices and less finger-pointing, following Energy Minister Mark McArdle's attack on Australia's 20% Renewable Energy Target this morning. Clean Energy Council Policy Director Russell Marsh said everyone was concerned about rising power bills, but ditching the Renewable Energy Target would be like cutting off our nose to spite our face.

"The Renewable Energy Target is a low-cost policy that stands to unlock more than $20 billion in investment and tens of thousands of jobs, much of which will flow to regional and rural areas. In recognition of this, the policy has the support of all political parties across Australia.

"In Queensland the Renewable Energy Target provides important support, particularly for the state's sugar mills, which use cane waste to produce renewable energy and generate an extra source of revenue. "Queensland is also leading the country in solar power, and all that new clean energy is helping to push back major investment in big power stations and save everyone money".

Mr Marsh said analysis by ROAM Consulting showed the Renewable Energy Target currently made up about 6% of power bills, a very small amount compared to the spiralling costs of poles and wires.

"Due to the winding back of support for renewable energy at both federal and state level and the declining cost of the technology, the cost of the Renewable Energy Target has peaked and will decline towards the end of the decade. We will be able to deliver more for less under this policy as the decade unfolds.

"In terms of an average annual household power bill, the Renewable Energy Target contributes about $100 per year today, but this is expected to fall to just under $60 in 2020. In contrast, the price of fossil fuels such as gas has risen sharply over the last couple of years, with further increases projected.

"The Bureau of Resources and Energy Economics this year estimated that renewable energy sources such as solar and wind would be among our cheapest types of power within 10 to 20 years. In the case of some types of bioenergy such as landfill gas, we are already there. Solar power fell in price by 45% last year alone", he said. "So, contrary to some recent commentary, investing in renewable energy will be key to protecting consumers against power price increases in the future".

Mr Marsh said the Energy Minister appeared to have been wrongly advised on some of the costs and projected impacts of the Renewable Energy Target. "Renewable energy across the country currently produces around 10% of our electricity. This will rise to around 20% by the end of the decade, driven by the lowest cost forms of generation available under the target", he said.

"We welcome the Queensland Competition Authority looking at the full costs and benefits of the Renewable Energy Target. The Productivity Commission has also recently looked at this policy as part of its work on the carbon price. "There are steps we can take to reduce power prices, but we need to work together rather than looking in the wrong place for scapegoats", he said.