The Clean Energy Council said that the Prime Minister’s comments have helped to move the public discussion on power prices in the right direction by calling for urgent action from state governments to enact reform and stop the run of price rises.
“Currently the cost of maintaining the nation’s poles and wires, along with the cost of meeting peak electricity demand, makes up 40 to 50 per cent of power bills and this is projected to rise under the current system,” the Council said.
Energy Supply Association of Australia Chief Executive Matthew Warren commented that energy bills have risen due to a combination of factors including urgent replacement of ageing networks, increased reliability standards, the growing cost of meeting spikes in energy demand on a few days pet year, the introduction of the carbon price and the pass-through of national and state renewable and energy efficiency schemes.
“The cost increases we have seen in recent years are real; they are the result of deferred spending on networks and the cost of allowing skyrocketing peaks in energy demand to continue unchecked across Australia,” Mr Warren said.
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Energy Efficiency Council Chief Executive Rob Murray-Leach wrote in RenewEconomy that because one sixth of national electricity networks – $11 billion in infrastructure – caters for peak events that last for barely four days per year, consumers are saddled with the costs of an energy market that is unnecessarily ‘plated with gold’.
Ms Gillard told the Energy Policy Institute that she wants to enact decisions in 2012 to address inefficiencies in the system and to guide price determinations beginning in 2013, with a preference to work co-operatively with the states.
“We won’t lightly use the big stick of regulation... but it’s a stick we hold and which we’ll use if required. One way or another, we’re going to get this done,” Ms Gillard said.
Federal Shadow Minister for Climate Action, Environment and Heritage Greg Hunt responded that if the Federal Government wishes to reduce electricity price rises, it should repeal the carbon price.
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