Australian Electricity Prices Expected To Rise 30% By 2013

The Australian Energy Market Commission (AEMC) estimates residential electricity prices are forecast to have increased by 30% on average in nominal terms nationally since last year to 2012-2013 – and it’s again been made clear renewable energy will not be the major contributor.

While some in the media continue to focus on solar power being the culprit in skyrocketing electricity costs; it will only be a bit player according to projections from the AEMC. In fact, with home solar power being only one aspect of renewable energy technologies; the continued demonising of Australia’s rooftop revolution would appear to be at best misinformed and at worst intentionally misleading.

The AEMC lists the following as being contributors to expected electricity price rises; some of which have already occurred since July 2010:

Distribution services – 41% contribution
Wholesale electricity -19% contribution
Retail electricity -14% contribution
Renewable Energy Target (LRET/SRES) – 11% contribution
Transmission services – 8% contribution
Feed-in tariffs – 3% contribution
Other jurisdictional schemes – 3% contribution

Based on a national expected average of a 30% increase, the above indicates renewable energy as a whole will contribute around 4.5% to additional electricity costs; an amount some may consider a small price to pay to kickstart a clean, renewable energy future for the nation and necessary to help repair the damage our decades of emissions intensive fossil-fuel based electricity generation has wrought.

While electricity price hikes being mainly driven by increases in the costs of transmission and distribution has been continually identified as the major culprit in various studies and reports, including by Australian Government’s climate change advisor, Professor Ross Garnaut, this point is often glossed over in order to focus undeserved negativity on the solar industry and households with solar panels. Both are becoming increasingly frustrated in being made a scapegoat as the era of cheap energy that never was comes to an end.

The AEMC’s Retail electricity price forecasts summary infosheet and full report can be viewed here.