October 9, 2012
It is well known that The Australian newspaper is opposed to the increasing use of renewable energy and the shift to a lower carbon intensive economy. It stands behind the interests of the fossil fuel industry and King Coal and is hostile to what it terms green ideology.
The Australian constructs its opposition in terms of renewable energy being very expensive. This can be seen from this June article on South Australia, which has both the highest installed capacity of wind in Australia (wind generation now supplys approximately 20% of annual demand.) , and the highest per capita installation of rooftop Photo Voltaic (PV) solar power.
Gary Sauer-Thompson, Star Fish Hill, Cape Jervis, South Australia
The Australian's story was based on an 18% price increase announced by Essential Services Commission of SA. According to The Australian the extra costs---estimated to be $140 a year to household power bills--- are primarily attributable to the state's solar feed-in tariff scheme, green scheme subsidies, carbon pricing and the federal government's 20 per cent renewable energy target.
What is missed out from this account is the wholesale price reduction resulting from the use of renewable energy and lower demand. The Australian is silent about the wholesale price of electricity decreasing whilst the retail price of electricity has increased.
According to the Australian Energy Market Operator (AEMO) The 2010/11 South Australian wholesale electricity market price is at its lowest since the start of the National Electricity Market (NEM).
The reasoning is fairly obvious--if you introduce more supply into the market, then prices fall if demand is static or flat. The Essential Services Commission of SA now recognizes this and it has made a Draft Price Determination to potentially reduce electricity prices by an average of $160 per household.
When put in the context of the resulting wholesale price reduction the actual cost of the feed-in tariffs and the cost of the RET is offset by the resulting wholesale price reduction.
What The Australian also doesn't acknowledge is that price rises in electricity are being used to prop up coal fired power stations and the networks.