In launching the Australian Government’s Energy White Paper; Minister for Resources and Energy Martin Ferguson acknowledged there is no quick or easy fix for the issue of rapidly increasing electricity prices.
Average national electricity retail prices have risen more than 40 per cent over the past four years and well above 50 per cent in some states. The Australian Government has said this is “simply not sustainable”.
Minister Ferguson says executing the energy market reforms outlined in the Energy White Paper will help to ease price pressures – over the longer-term.
A major point made by the Minister while launching the Energy White Paper related to peak demand.
“Pricing structures are resulting in inefficient peak demand. This means that additional capacity is required to be built that might only be used for one per cent of the year.”
The cost of this capacity is being distributed across all consumers – and those who don’t use it are subsidising others by as much as an estimated $330 per year.
The Energy White Paper cites an example of a 2kW air conditioner that may only cost a consumer around $1500 to purchase, but imposes costs on the energy system – and consequently all consumers – of up to $7000 when adding to peak demand.
“This is clearly an unfair cost, particularly on those less able to afford it. Rectifying the situation requires an integrated approach: consumers must be given the right signals, through flexible time-of-use pricing to make decisions about their energy use.” said the Minister.
This means consumers using too much electricity during peak demand periods may be paying even more for electricity soon.
Along with increased pricing; the Energy White Paper states tools such as smart meters and smart appliances will also be important in helping to reduce peak demand. One such monitoring tool recently unveiled is the Energy Matters Power Monitor; which will assist solar households manage their consumption to match their solar production; helping to make their investment in a solar panel system even more valuable.
With regard to renewable energy, modelling within the Energy White Paper shows 40 per cent of Australia’s electricity needs could be met by “clean” energy by 2035 and potentially up to 85 per cent by 2050. The Australian Government considers gas a clean energy source – a view that wouldn’t sit well with some. Energy White Paper reforms would certainly see the love affair with gas continue; but there will also be a strong focus on renewables.
“If this clean energy transformation were to be realised it will require more than $200 billion in new generation investment between now and 2050, including around $50–60 billion in gas and $100 billion in renewables,” said Minister Ferguson.
The Australian Government still seems set on also pursuing Carbon Capture & Storage (CCS) and has already committed to providing billions of dollars in funding for the controversial suite of technologies.
The Minister said the key to delivering on the reforms contained within the Energy White Paper will depend largely on agreements being reached by the Standing Council on Energy and Resources followed by the Council of Australian Governments later this year
Energy White Paper 2012 – Australia’s Energy Transformation can be viewed in full here.
