Page 1714 - Week 05 - Wednesday, 9 May 2018
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I would like to touch on some of the points that Mr Coe made. The cost of achieving 100 per cent renewables is expected to peak at less than $4.90 per week per household in 2020. The most recent estimates are lower than the government originally anticipated for this scheme. I am pleased about that. This is a decline over time as the wholesale market price has risen. At the same time, participants in the ACT’s energy efficiency improvement scheme save on average $5 per week. For those households participating in that program, that is a net gain—a small but nonetheless net gain; certainly not an imposition.
Mr Coe did speak of the fact that power prices have increased significantly since 2009. This is absolutely true. We have all seen it. We have seen the very significant energy price rises. It is worth reflecting on what has driven those. Reports from the ICRC, the ACT’s independent price setting authority, are very clear that prices in recent years have been driven by two things: those two things have been what is colloquially referred to as the “gold plating of the grid”, overinvestment; and having to invest heavily in the grid to cope with peak demands, which is driven by those really hot days in Australia.
Again, it comes back to the ironies here. The cost of electricity has been driven up by that, and it has been driven up by a spike in wholesale electricity prices. Particularly last year, when we saw an 18 per cent increase in electricity prices in the ACT from the ICRC, that was sheeted home to those two causes predominantly. The big increase last year was driven by the closure of the Hazelwood coal-fired power station. That was done because its French owners simply decided it was too expensive to upgrade. And they just got out. There was no orderly transition here. There was no strategic decision about when to close Hazelwood. It was a travesty the way that Hazelwood closed down. It had a terrible impact on the local community, whose jobs were just dropped like that, and it had a terrible impact on the national energy market in terms of no clear transition plan.
But as more renewables are coming into the grid and replacing the lost capacity from Hazelwood we are seeing those wholesale energy prices come down. We will start to see that flow through in energy price decisions over the next couple of years. It is important to reflect on what has driven this. Mr Coe is right: it is significant increases that have really put pressure on households. But it is actually the renewables in the grid that are starting to help bring those prices back down.
One of the features of the large-scale feed-in tariff auctions has been the 20-year price contracts and the contract for difference process. That will certainly continue to protect ACT consumers into the future. Increased energy use precipitated by climate change, combined with high and, at least for the next few years, increasing energy prices, has prompted a call from the community to assist in making houses more energy efficient and more livable.
As Ms Orr highlights in her motion, the ACT government is undertaking initiatives that support all Canberrans to think and to live sustainably. From the energy we use to the products we throw away, we have various programs that encourage us to be more sustainable; programs to help us manage and improve accessibility to efficient,
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