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Saturday, April 11, 2015

"Failing to emit enough carbon" tax

The Australian Government's Energy White Paper is so bad its embarrassing.

Oh Dear, I'm Just So Embarrassed

Oh Dear, I'm Just So Embarrassed

Photo: Jane Cumming

It commits Australian families and businesses to power bills at least 40 percent higher than needed. This is detailed in a related post - "Electricity peak period pricing a poor idea".

It commits to slugging Australian families and businesses billions of dollars for smart meters to solve a problem that wouldn't exist without the Government regulations that encourage and reward excess investment in poles and wires.

It says the Australian Government's priority is a "failing to emit a enough carbon" tax - and, wait for it... calls this reverse carbon tax on families and businesses "cost-reflective pricing"!!!

This is not a joke. It is at page 6 and 12 of the Abbott Government Energy White Paper released for April Fool's Day.

The extract below describes this priority - to impose higher power bills through a reverse carbon tax - on families and businesses encouraged previously by the Government to invest in solar panels.

"In recent years, there has been unprecedented growth of distributed generation on the network, with consumers generating their own electricity, mostly in the form of rooftop solar photovoltaic (PV) panels. Initially this was supported through highly subsidised feed-in-tariffs in different jurisdictions and enhanced small-scale technology certificates under the RET, which were aimed at supporting the uptake of renewable energy. However, ...
Consumers without distributed generation currently subsidise those with distributed generation. Distributed generators use less total electricity from the network and pay less, while still using the infrastructure for reliable supply..."

The Australian Government’s priorities in energy market reform are the:

  • ...
  • rollout of cost-reflective tariffs to reduce cross-subsidies between consumers and drive better uptake of enabling technologies (particularly advanced metering) that allow consumers to respond to price signals [i.e. "pay more"] .

The extract below from page 11 describes the policy of building an electricity supply system that is 40 per cent more costly than is needed and then slugging families and businesses with the cost of smart meters to ensure they pay more for this excess equipment that sits idle throughout each year.

...Cost-reflective tariffs

"The most variable elements of cost relate to the wholesale price of electricity at the time of use, and building the maximum (peak) capacity needed in the electricity network
To maintain reliability in supply, networks must have the capacity to cope with this peak pressure. The scale of peak demand therefore influences network costs, which is around half of the total electricity bill (AEMC 2014)."

The cheaper and sane option is the one Greg Hunt hit upon a couple of years ago: don't build more poles and wires than you need.

"The committee is swayed by the weight of evidence suggesting the current regulatory framework not only permits but incentivises inefficient over-investment in network infrastructure," the tri-partisan committee found. The network's artificially high rates of investment returns "have substantially driven electricity prices directly and have effectively 'poured petrol' on other smouldering price pressures."