It’s becoming increasingly clear that should the carbon tax should be axed, any relief in electricity prices may not occur as soon or be as significant as electricity consumers may hope.
In September, we cleared the air on electricity prices and suggested despite an undertaking from the Government to cut the cost of electricity, why it may not happen or if it did; why it may be short lived.
Assuming the carbon tax is repealed, electricity companies say it may take months for the effects to be felt and price reductions could vary depending on the state or territory according to The Australian.
The article states EnergyAustralia has said “there is no guarantee that final energy prices will move proportionately with the average carbon price reduction in wholesale energy market”.
Part of the reason for this is the true bogeyman of power price rises – network charges. These comprise around half of a power bill and could rise again on July 1 next year in most states; gobbling up part or all of any carbon tax axeing benefit.
The other potential sting in the tail of the abolishing of the carbon tax relates to consumption. When the price of something decreases, that often leads to an increase in consumption. An increase in consumption of electricity may lead to more spending on infrastructure; putting further upward pressure on network charges.
The only sustainable solution to bring real power bill relief while also addressing environmental issues still appears to be solar energy. Solar panels not only bring benefits to the homes and business where they are installed; but also to the wider community by reining in wholesale electricity costs and reducing the need for new infrastructure.
Earlier this year, the Centre for Policy Development’s estimated rooftop solar in Australia is saving all electricity consumers between $300 million and $670 million each year in wholesale electricity costs.
