A leading market analyst calls the Australian Competition and Consumer Commission report on electricity pricing a partisan attempt to help coal generators.
Energy consultant Danny Price told the ABC the new report is a “political document”. Its proposals are likely to drive investors away from the energy market rather than reduce prices, he claims.
The manager director of Frontier Economics also said the ACCC report is a smokescreen because it blames states and power companies for market disarray. He said the real culprit is Canberra and its failure to negotiate a carbon pricing policy.
Lack of carbon pricing policy is the problem
Intervention by the market regulator would be unnecessary under a carbon policy, Price said.
Problems leading to lack of investment were therefore “logical market responses” to confusion over a lack of carbon pricing policy.
Price added that the ACCC’s Retail Electricity Pricing Inquiry is another unnecessary report, reinforcing the confusion that is scaring investors away.
ACCC electricity pricing report underwrites coal fired power
The ACCC recommends a Federal Government pricing guarantee. Paying $45 to $50 per megawatt hour of electricity from years six to 15 would subsequently help new entrants secure finance.
Yet Price claims this will mainly help coal fired generators. It is particularly hard to finance new coal plants because of the possibility of a carbon pricing policy introduction.
Renewable generators like wind and solar energy farms don’t face this problem. The ACCC recommendation therefore underwrites coal-fired generators.
A sensible and bipartisan carbon pricing policy could have been introduced years ago, Price said.
ACCC says proposals can reduce household bills
The ACCC report came up with 56 recommendations. These aim to simplify power plans, give customers real discounts, crack down on market manipulation and support new entrants into the power market.
The report claims reductions in household energy bills of 25 per cent or more based on its recommendations.
However, the Clean Energy Council and Smart Energy Council have hit out at ACCC proposals to remove the national rooftop solar subsidy by 2021.
According to industry bodies, solar installations and battery storage are among the few ways consumers can reduce their power bills.
