Page 679 - Week 02 - Thursday, 20 March 2014
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I would also like to say that I am now more convinced that the territory can achieve a competitive price on green energy generation. Signing power purchase agreements directly with generators in this current market is proving to be very good value for money for the territory, as I have touched on earlier today. Had we gone down the path of putting a requirement on retailers to mandatorily purchase a certain amount of renewable energy for on-sell, we may have been affected by the virtual monopoly of our main energy retailer ActewAGL, who would have been required to negotiate contracts with generators. A lack of competition in our retail sector might have meant that we would not have got the benefits that we are now looking at.
The government has modelled the cost impact of this bill—and this goes to the earlier question of whether this legislation should be referred to a committee—and also the cost impact of meeting our 90 per cent target, and that modelling shows the cost being around $4 a week at its peak. While the Greens always have an eye on how cost affects those in our community who are least able to afford the increases, the cost seems reasonable, considering what we are getting. We are getting price certainty, we are getting an improved environmental performance for future generations that we should be willing to make a little sacrifice for.
The cost of energy has increased right across Australia over the last decade, and primarily this has been due to a late investment by governments in energy infrastructure, something that has affected the ACT somewhat less than Queensland and New South Wales, and I think that is reflected in the price differential. The order of magnitude for the average household energy bill is $500 to $600 less a year in the ACT than it is in New South Wales, just across the border in Queanbeyan. It is an extraordinary difference, one that we should consider ourselves very fortunate to have here in the territory. Those price increases have been driven by a necessity to invest in infrastructure, on the whole.
Plenty of people will tell you it has been because of the mandatory renewable energy target and feed-in tariff schemes, but the real price increases have been driven by investments in the network, in the grid infrastructure, and this has been driven by a requirement to manage peak loads during hot summer days, somewhat ironically, by all the air-conditioning systems that are turned on when it gets so warm, as we see record hot summer temperatures across this country.
One of the factors that are playing out when it comes to energy prices is that in opening up Australia’s gas markets to Asia, we are now having to compete for access to domestic gas, and the consequence of that, which we are now seeing play out, is that gas retailers are requesting price increases of some 20 per cent in southern New South Wales and the ACT. That is a very substantial issue that we are going to need to monitor closely.
To those who criticise such policies as subsidising renewable energy, I would remind them of some basic principles. It is not always bad policy to subsidise activities that are in the public good. There is a benefit to this, and there is a cost to public goods, and that is something we should be willing to pay.
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