Page 1099 - Week 03 - Thursday, 22 March 2012
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savings on their energy bills—savings which will continue for the life of the energy efficiency measures implemented in their homes.
As in other Australian schemes, penalties will apply for each tonne of abatement a supplier falls short of their target in a given compliance period. This provides a strong incentive for electricity suppliers to undertake activities that are cheaper, on a dollar-per-tonne basis, than the penalty price. The funds raised by contributions will be reinvested in the scheme and support complementary efficiency programs for areas of the community in need. Compliance will be carefully monitored by a scheme administrator, who will report annually on the performance of the scheme. The scheme is intended to also be extended to the small business sector.
The success of this scheme will lie in its market base and through the setting by the minister of an energy savings target for the reduction in greenhouse gas emissions by the setting of a priority household target and by the determination by notifiable instrument of eligible activities. In other words, this scheme differs from other programs operating in the territory in that it imposes mandatory and measurable savings targets on electricity suppliers and because it defines the eligible activities and electricity retailers who fail to meet prescribed targets will face penalties.
A comprehensive regulatory impact statement has been prepared regarding the inclusion of, and impact on, the residential sector, and I will table this for the information of members. A further regulatory impact statement is being developed regarding the inclusion of the business sector in this scheme, and this will be provided later in 2012.
The modelling on which the scheme’s expected costs and benefits are based is the same as that deployed for other energy efficiency schemes within Australia but obviously adapted to the ACT’s particular circumstances. The modelling is complex and necessarily built around a number of assumptions. These assumptions have been deliberately made conservative so that the scheme’s predicted outcomes are both robust and reasonable.
The interpretation of such complex analysis for the purposes of explaining the likely effects of the scheme to the community is challenging, and it is clear to me from the public commentary to date around this initiative that there has been some confusion on how the scheme will operate, who will benefit and to what extent.
Let me put it in simple terms. The scheme is voluntary; people can choose to opt in. The savings in the scheme accrue to participants in it. The modelling predicts a cumulative average net benefit across all households over the three years of its operation at approximately $300. We know that all households will not participate and so the savings, on average, will be even higher for participating households. The savings in power bills to participants will continue to accrue long after the scheme has closed. There is a cumulative average cost across all households over the three years of the scheme of approximately $87. This amounts to well under a dollar a week in additional costs. And remember that low income households will be protected by both the provisions in this scheme and the government’s existing concessions and support measures. And, finally, this relatively minor cost will deliver a reduction of
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