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energy: a contested policy space « Previous | |Next »
October 10, 2012

As Michelle Grattan notes the first three months of carbon pricing (she continues to calls it a carbon tax) have been an anti-climax even though Abbott seeks to keep the tax as centre of his campaigning. She also notes that climate change has turned from an emotional rallying cry to a practical policy challenge with all the accompanying difficulties.

That is a reasonable interpretation of the current state of play in Australia---the carbon price framework and the renewable energy target orients the country in the right direction, and they provide the long term predictability and stability necessary to decarbonize the economy. The immediate target is to get to 20% renewables by 2020.

PopeDAbbottclimatechange.jpg David Pope

What Grattan does not say is that the core policy issue has shifted to electricity and the growth of renewables. Energy has become a fiercely contested policy space due to the policy of phasing out fossil fuels and replace them with renewable energy and other forms of very low emission energy.

There is the large gap between wholesale and retail price of electricity; the fight against the increasing supply of renewable energy (wind and solar photovoltaic) to protect the interests of the fossil fuel generators; and the structural barriers in the way of renewable energy that have been created by the electricity market rules to protect the electricity market operators.

Big Energy is waging a fear campaign whilst the Gillard government’s ministers are fighting backroom battles among themselves (Martin Ferguson, the energy and resources minister, is pro-fossil fuels).

We know that the states have been increasing prices due to infrastructure gold-plating ----one sixth of our national electricity networks ($11 billion in infrastructure) caters for peak events that last for barely four days per year.

There is $45 billion that’s going to be spent in the next five years on new poles and wires and gold-plating the system. That means increased prices for consumers because the rules of the National Electricity Market allow the networks to pass on their costs by charging consumers for upgrading their infrastructure. This gold plating gives the states that own the fossil fuel generators (eg.,Queensland and NSW) a profit stream from the existing system. The Victorian government, which privatised its electricity generators has been captured by Big Energy.

These states are opposed to regulatory reform and the big energy companies have a exceptionally well-honed ability to game their system through strategic lobbying and because of the power they hold in Australia’s economy. To date, the costly and uneconomic nature of clean energy has been the most effective argument wheeled out by fossil fuel industries protecting their turf.

However, the problem they face is that rising electricity prices themselves is driving the installation of household solar and making their households more energy efficient. Reduced demand means reduced project for Big Energy. Solar threatens the existing business models of retailers and wholesalers.

| Posted by Gary Sauer-Thompson at 10:09 AM | | Comments (8)


" the fight against the increasing supply of renewable energy (wind and solar photovoltaic) "

One of those anti-renewable groups is the Landscape Guardians, an astroturf group with with its links to the climate denialist movement. They are anti-wind and aim to kill off the wind industry.

In Queensland and NSW the owners of the networks and the key power-brokers in the regulatory system are the same entities: state governments. There’s an obvious financial gain for state governments that can reap higher profits from state-owned utilities.

Many consumers are feeling the pinch when it comes to energy bills at the moment. The ability to generate and use your own green power in a well-insulated and well-controlled property is vital to enabling people to get off the dependency rising fossil fuel prices

in Australia energy demand is actually going down. What that means is the pie isn’t getting bigger for the energy industry. Now the renewable energy is eating somebody else’s pie--the fossil fuel industry.

Those people don’t like it, and they’re screaming very loudly. They are calling for either the abolition or the scaling back of the renewable energy target.

The mining and fossil fuel industries lobbying for new regulations and industry protections. They have the vast lobbying power and the mainstream Right will continue their unequivocal support for fossil fuels.

Finding ways to overcome the barriers to renewables in the national electricity market doesn’t come through the renewable energy target or the ETS. It comes through the regulatory process---CoAG.

the attraction of rooftop systems is that they are a hedge against rising electricity costs. Households that invest in rooftop photovoltaic systems do so in the expectation that they will be able to consume less grid energy, and thereby gain a sense of control over their costs.

"even though Abbott seeks to keep the carbon tax as centre of his campaigning."

I watched Question Time today and in question after question the Coalition kept stating that the 60-80 per cent increase in electricity prices across the nation was due to the carbon tax.

The various reports from the regulatory state authorities ( in the Coalition's own documents they were quoting from) show that the increases were in line with Treasury estimates --around 9-10 per cent. People have been compensated for this increase.

The rest of the increase is the gold plating of the networks by the state authorities or energy industry.

It's a dumb line of argument by the Coalition as their claims are torn to shreds each time. So why persist?