New South Wales, Australia, Enery Minister Chris Hartcher has called for the closure of the national Renewable Energy Target, claiming it is the cause of increased electricity prices. The Independent Pricing and Regulatory Tribunal (IPART) has released a report stating inflated prices are a result of rising network costs as well as the introduction of the carbon pricing mechanism, effective July 1.
IPART’s report states that the additional costs incurred by these green schemes have to be passed on to consumers if the retailers are to remain financially viable, causing electricity prices to rise to around AUD$315 on average. In percentage terms the costs of complying with the green schemes has seen the fastest growing proportion of a customer’s bill. However, alongside the extra cost to the consumer, the government has implemented financial assistance packages for low and middle income households to help with the cost of living. To IPART, this demonstrates the ineffectiveness of the schemes which are in dire need of modernization.
“Once the carbon pricing mechanism is operational, it is likely many of the existing mitigation programs will need to be redesigned and some may become redundant. By ensuring that the schemes are complimentary to the carbon pricing mechanism, unnecessary costs can be minimized”, says the report.
In response to minister Hartcher’s comments, Geoff Bragg, NSW chairman of the Australian Solar Energy Industries Association (SEIA) said, “Half of the coming electricity price rises are a result of infrastructure upgrades required to keep the aging electricity grid operating. The IPART release clearly states 0% rises from wind and solar green schemes. The NSW government blaming the national Renewable Energy Target is side-stepping the real issue. We need to transform our energy system to be more efficient and take full advantage of distributed generation from solar and other renewables.”
IPART Chairman, Dr Peter Boxall “There are aspects of the National Electricity Rules and the National Electricity Law that could be changed to reduce pressure on prices. We’ve also outlined some areas around reliability standards, green schemes, and subsidies that could be reviewed to ensure maximum cost effectiveness to limit future price increases.”