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the politics of electricity « Previous | |Next »
April 4, 2012

Instead of the commentary about the ALP being lost or in the wilderness we should be talking about the politics around energy and the rising price of electricity. Electricity prices are a hot political issue and the price just keeps on increasing.

These have risen about 40 per cent since 2007 and they are now tied in with the pricing of carbon even though the major component of electricity prices (50 per cent?) – is network charges. These are expected to keep climbing to fund infrastructure investment in the national centralized grid--the t current five year program is to spend $45 billion in grid infrastructure.

MOirALPlost.jpg

We can expect a federal-state conflict over the impact of a carbon price on households even though the states no longer set the price of electricity. It is the national electricity market that sets wholesale prices and a national regulator that oversees network prices. It is a network that is geared to corporate profit and not to energy sustainability.

Thus we have the the politics of neo-liberalism---‘markets’, when freed from state interference, are the most efficient, and most moral, way of providing goods and services in society. Neo-liberalism is a particular mode of governance in which the state legislates to secure freedoms for capital. In the case of electricity privatisation the main beneficiaries have been corporations rather than consumers and this has been facilitated by a whole host of new state regulations.

One way to counteract this state of affairs is too leave the centralized national grid and shift towards decentralized power generation.

| Posted by Gary Sauer-Thompson at 8:40 AM | | Comments (4)
Comments

Comments

As usual, we can begin by looking at subsidies for fossil. Start with this Crikey piece:

http://www.crikey.com.au/2011/11/01/nsws-great-big-coal-subsidy-scandal/

Constant rising prices impacts on families decisions to have more children which then impacts on Australias need to import young people down the road. Perhaps there needs to be a family subsidy built into basic services like there is for pensioners.

This Reserve Bank doc (PDF warning) provides a great rundown on the makeup of electricity prices and other cost of living pressures. It includes a summary of the exact mechanisms in the National Electricity Market and the calculation of fixed-price network costs:

Factors contributing to household cost of living pressures
http://www.rba.gov.au/foi/disclosure-log/rbafoi-101115.html