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Alarmed by rising electricity prices?

admin — Wed, 06 Feb 2013 01:36:55 +0000

Electricity prices have been rising alarmingly over the past few years. It’s hard making sense of all the electricity companies all trying to win your business with amazing and complex sounding offers.
The 30% discount on offer may not be the best offer… you need to take into account the discount offered and the rates to really know how much you’re saving.
Locking in rates may seem good now, but could cost you big in the long run. Comparing your usage habits can help us to properly determine if locking in rates is right for you.
When you are choosing a better energy deal there are many different factors to compare to ensure you get a good deal. Daily usage, where you live, contract type, meter type and rates are just some of the items to compare… and the list goes on.
The good news is you can speak to one energy consultants for free now. Click here for a call back or speak to one of our Youcompare energy consultants for free on 1300 683 009.

2 tips for comparing electricity and gas deals

admin — Tue, 05 Feb 2013 05:25:32 +0000

Electricity prices have been rising alarmingly over the past few years. It’s hard on your own comparing electricity company’s offers, who are all trying to win your business with amazing and complex sounding deals.

Here’s three tips to help you to compare electricity deals:

Tip one – make sure you are comparing apples with apples.

That massive per cent discount on offer may not be the best deal for you… you must take into account the usage and supply rates on that deal; not just the enticing discount to really know how much you’re actually saving.

Tip two – compare energy usage before you lock in rates.

Locking in rates may seem good now, but could cost you big in the long run. Comparing your usage habits can help properly determine if locking in rates is right for you.

The good news is you can speak to one energy consultants for free now. Click here for a call back or speak to one of our energy consultants for free on 1300 683 009.

Skyrocketing electricity costs makes cotton-growers take stock

admin — Wed, 09 Jan 2013 00:34:45 +0000

THE state’s cotton industry has been savaged by energy costs that have up to tripled, says a submission to the Queensland Competition Authority.

The hikes come as a return to dry conditions in central Queensland has meant many cotton growers are abandoning their present crop just a year after heavy rains provided one of the best yields on record.

An indication of how the industry’s fortune has been turned upside down are the dam levels at St George, a prime cotton region in the state’s southwest, that have dropped to 30 per cent, according to Balonne Shire mayor Donna Stewart.

Cotton Australia said the changes to tariffs following the QCA draft determination would have a significant impact on growers who relied on electricity for irrigation pumps.

“Modelling shows that in a number of instances the impact will be in the order of 200 to 300 per cent increases,” Cotton Australia’s submission said.

It called for the State Government to commission a review to ensure irrigators had access to tariffs that matched their usage requirements and provided affordable electricity.

Increasing power costs are forcing many cotton growers to abandon their expensive electricity infrastructure and make the switch to diesel-powered pumps.

Price of the summer peak

admin — Mon, 07 Jan 2013 00:49:07 +0000

IN late November, summer began early for Victorians and South Australians. As temperatures soared past 35C in Adelaide and flirted with 40C in Melbourne, sweltering residents took refuge in the comfort of their air-conditioned homes.

On November 29, thousands of kilometres away on the central coast of NSW, one of the state’s energy generators, Delta Electricity, switched on its flagship gas-fired power plant to absorb some of the surging national demand.

Between 1995 and 1998, Australia’s state-based electricity markets merged (except for Western Australia’s, which is too far away) into the National Electricity Market, the world’s biggest interconnected power system, covering a distance of 4500km. Tasmania is a net energy exporter, while NSW is typically an importer.

Nearly 40m high, the equivalent to four jumbo jet engines huddled alongside each other, Delta Electricity’s $500 million gas-fired power station at Colongra is only turned on a few days a year, when daily demand surges past about 12,000 megawatts.

“The power station is up and running within half an hour,” says Delta chief executive Greg Everett, “whereas our coal power stations can take a day to warm up and are also much more expensive to build or buy.”

“Gas-fired power stations are the Linda Evangelistas of power supply,” says Matthew Warren, CEO of the Energy Supply Association, referring to the supermodel’s famous quip she only got out of bed for $10,000 a day.

Coal cheaply supplies almost 80 per cent of Australia’s electricity needs, but the 12 per cent sourced from about 25 gas-power stations, mainly to satisfy “peak demand” on hot days, massively increases the capital costs of Australia’s electricity network.

Sydney and Melbourne electricity prices have tripled since 1998, reversing more than four decades of real price falls. Since 2008, retail energy prices in Sydney, Melbourne and Brisbane have surged between 10 and 20 per cent a year, so much so that total demand has started to wane.

“Electricity consumption grew about 3.5 per cent a year since World War II, but very recently has started to fall,” says Tim Reardon, executive director of the National Generators Forum.

But maximum demand on very cold or hot days has still been growing, thanks to our growing battery of 8.5 million airconditioners, prompting huge investments to upgrade the energy grid.

“Around 25 per cent of the electricity network is built to run on only those handful of days a year when demand peaks, leaving billions of dollars of plant and equipment sitting idle for most of the time,” Warren says.

The growing costs of keeping comfortable on a handful of days a year has pushed up average costs throughout the year.

Cheap energy had long been one of Australia’s comparative advantages, underpinning our fledgling manufacturers. “Sydney is a geological freak,” says Warren, “surrounded by copious volumes of coal in the north and south.”

But the ultimate cost of electricity has decoupled from the price of coal, thanks to a perfect storm of rising “peak demand”, obsolescent infrastructure, a dubiously effective raft of “green schemes” and a flawed regulatory system that has encouraged unnecessary investment.

Government rules ensuring households are left entirely in the dark about the huge variation in the cost of supplying power, including at peak times, have made the situation worse. Customers face no incentive to be careful with electricity consumption, resulting in much higher prices for everyone all year round.

The standard wholesale prices of electricity are about $30 to $60 per mega watt hour, but on very cold and hot days the price can rocket beyond $12,500 Mw/H.

Power consumption, and the wholesale electricity price, surge in the morning at about 8am and then again at about 7.30pm.

“If prices bore a closer relationship with real costs a factory might shut down on a 40C day, or a middle-class family might choose to turn the pool filter off,” says Warren.

“Households without airconditioners pay an implicit subsidy of $330 each year for upgrades to networks and generators to ensure electricity can get through in times of high demand,” he adds.

At the same time as peak demand has been rising, the ageing grid of power lines and substations is being upgraded. The bulk of electricity generators and supporting grid were built during the 1960s and 70s with lifespans no longer than about 50 years. More than half the increase in power costs since 2007 is a direct result of extra investment in electricity networks.

Improved reliability standards have sped up the refurbishment. A major blackout in Sydney in 2004 prompted state governments to ratchet up reliability standards.

If households realised the ultimate cost, they might have complained less about blackouts.

David Leitch, a utilities analyst at UBS, says “the NSW government’s decision to make Sydney an N-2 city rather than a N-1 city, meaning at any given time two rather than one major lines could be down without triggering major disruptions, pushed up investment costs by 25 per cent”.

Flawed regulatory arrangements have encouraged excessive investment, lumping consumers with higher bills than they should otherwise be paying.

Since the Australian Energy Regulator became the national body responsible for setting the maximum prices energy networks could charge in 2009, the pace of price increases has accelerated dramatically.

Unlike electricity retailers or electricity generators, electricity networks are natural monopolies, resulting in government regulation of their charges.

Every five years the AER sets a price trajectory for the electricity grids across Australia’s states, except those in Western Australia. The regulatory price caps of the networks are set according to the value of their assets, so they have an incentive to “gold-plate” their networks to ensure higher returns, unless regulators have the power to penalise them for over-investing.

The value of the regulated asset base of NSW networks has risen from $10 billion to $30bn since 2005. In the decade from 2001, Queensland’s transformer capacity grew by 130 per cent, more than it had in the 23 years prior.

By 2015, NSW networks will have a regulated asset base per customer that is more than five times greater than electricity networks in Britain, where regulators have had far greater powers to penalise firms for excessive investments and to force them to conform to efficiency benchmarks. Permitted rates of return on investments for networks in Britain are about 3 percentage points lower than in Australia in 2010, according to a recent study.

“In Australia, whatever networks spent would be included as a valid capital expense, forcing up costs in the next regulatory period,” Phil Manners, an economist at the Centre for International Economics in Sydney, says.

The chairman of the AER, Andrew Reeves, concedes the rules had been too generous to the electricity networks, permitting rates of return on investment of about 9 per cent.

A new set of rules, which have effect from 2014, are likely to limit future prices increases, he says. “If we find that any of the expenditure was unnecessary or inefficient we can refuse to add that expenditure to the network’s asset base – so they won’t earn a return on the investment,” he adds.

Nearly 20 years after the Hilmer report recommended privatising state electricity assets, only in Victoria has the state government privatised all its electricity assets – generation, distribution and retail provision.

The Productivity Commission says “the rationale for state ownership of network electricity businesses no longer holds”, pointing to the unfairly cheap borrowing costs publicly owned companies enjoy over private competitors, which in turn encourages lazy and excessive spending.

“State-owned businesses in NSW and Queensland have increased their capital expenditure to levels well above those of private firms in Victoria for a level of peak demand,” said the commission recently, citing studies that suggest state-owned networks in NSW and Queensland were half as efficient as their privately owned peers in Victoria.

“State-owned businesses have had relatively large increases in regulated assets for a given increase in their network capacity,” it added.

So far, renewable energy schemes and the carbon tax make up less than 20 per cent of households’ ultimate energy bill, but falling consumption and rising commodity prices may increase their burden.

The Renewable Energy Target forces retail electricity providers to source energy from more expensive renewable sources, such as wind and solar energy. By 2020 electricity retailers will be required by legislation to buy 41 terawatts of energy from renewable sources.

“At the time RET was legislated, such a sum was bound to amount to around 20 per cent of total electricity consumption coming from renewable by 2020,” explains Reardon, “but falling electricity consumption could mean the ultimate fraction is much larger, putting even more pressure on prices.”

Cameron O’Reilly, chief executive of the Energy Retailers Association, points out that solar and wind energy are about three times as expensive to buy as electricity from coal-fired power stations.

Gas is about half as emissions-intensive as coal, but O’Reilly worries the $23 a tonne carbon tax will be ineffective because it won’t provide sufficient incentive to shift from coal to gas.

“If Australian gas prices ever rise to the levels in Japan and Korea, coal will remain a more attractive fuel for electricity generation, even with a carbon tax, which would simply serve to damage the country’s economic competitiveness by artificially putting up energy costs,” O’Reilly says.

Reardon agrees, adding that “the carbon tax would have to be between $80 and $100 a tonne to have any substantial impact on the energy supply decisions”.

Making forecasts about future energy prices is difficult, though. Warren points out current coal prices have been fixed by long-term contracts. “In 2015 lots of those contracts will need to be renegotiated at higher coal prices,” he says.

Manners from CIE is critical of state-government feed-in tariffs, which force retailers to buy solar energy from customers with solar panels.

NSW’s scheme, introduced by the previous Labor government, forced retailers to buy solar energy at six times the market price.

“The government has closed the scheme to new entrants, but it’s still costing households around $40 a year on a typical bill,” he says, pointing out the scheme effectively forced poorer households, who couldn’t afford solar panels to subside the energy use of richer ones who could.

Power bill cuts at stake in AGL fight against ESCOSA

admin — Thu, 06 Dec 2012 23:22:20 +0000

AN average $160 cut to household electricity bills is at stake when the Supreme Court on Friday begins hearing AGL Energy’s challenge to the electricity regulator’s decision to lower power prices.

The state’s largest electricity retailer argues the Essential Services Commission of South Australia wrongly exercised its power to review prices when it decided on October 2 to amend a 2010 price determination following a review forced by welfare groups.

As first reported on adelaidenow, AGL Energy announced late on Tuesday it would launch legal action against ESCOSA in the state’s highest court.

ESCOSA’s change stands to cut an average $160 from the electricity bills of South Australians on standing contracts, although energy retailers have announced savings wouldn’t be passed on to about 570,000 households on market contracts.

Premier Jay Weatherill yesterday said while AGL Energy had the right to pursue legal action, the State Government wanted a “strong regulator that holds their feet to the fire in relation to energy prices.”

“The regulator’s made a decision about an 8 per cent reduction in electricity prices with the standing contract, and obviously we support that, we advocated for that,” he said.

AGL Energy claims the decision in SA, along with a similar decision in Queensland, would reduce profit by about $45 million in the 2012-13 financial year, and curb investment in electricity networks.

The company will have its first opportunity to put their position to the Supreme Court during a directions hearing on Friday.

In a summons obtained by The Advertiser, AGL Energy said the commission’s draft decision was a breach of the law.

The company also claimed that the draft determination was an improper use of ESCOSA’s powers, as it took into account irrelevant factors when making the determination, while failing to consider other relevant factors.

SA Council of Social Service executive director Ross Womersley said AGL Energy’s actions clearly demonstrated a lack of interest in the rights of the state’s energy consumers.
Read More:
“AGL Energy have clearly indicated their interest is primarily only in their shareholders,” he said
http://www.adelaidenow.com.au/business/sa-business-journal/power-bill-cuts-at-stake-in-agl-fight-against-escosa/story-e6fredel-1226530737639” title=”Power bill cuts at stake in AGL”>

PM’s power plan can’t fix shock

admin — Tue, 04 Dec 2012 02:33:40 +0000

JULIA Gillard’s announcement yesterday that she would take action to “save families up to $250 a year on electricity bills” is readily understandable. With a long, hot summer in prospect, Australian families are in for an electric shock.

But Gillard’s efforts to blame Coalition governments for the price hikes are just more of the finger-pointing that has poisoned relations between her government and the states. Were Gillard serious about cutting bills, she would get rid of green imposts that hit consumers for no discernible environmental benefit, and encourage the speedy privatisation of inefficient, state-owned power businesses. Instead, she is doing the opposite.

That families will suffer from high electricity charges is undeniable. With airconditioning ubiquitous, household power consumption surges in hot summers. At the same time, electricity prices are now 40 to 50 per cent higher than when Labor came to power in 2007 and have increased by 10 to 20 per cent in the past year alone.

So Christmas bills will bring a double whammy: higher quantities consumed, and a steeply increased price per unit.

In Queensland, for example, the typical household will consume 50 to 100 per cent more power in a hot summer than in the winter and spring months. With the price 10 to 20 per cent higher than last year, that will translate into a slug of $100 compared with last summer’s bill and $300 to $400 more than last spring’s.

Why charges are now so much higher is no mystery. Again, consider Queensland: climate change charges built into electricity prices have increased tenfold since 2007-08, and now exceed $1 billion a year. In 2007, Queenslanders paid less than 3 cents in the dollar on climate change imposts on electricity; now, they pay 17cents.

With the carbon price set to increase by nearly a third over the next five years, that share is only going to rise. Indeed, despite everything Gillard says, forcing up electricity prices, thus inducing households to slash their consumption, is crucial to her government’s climate change policies: as Treasury said in its carbon tax report, reducing “electricity demand is an important source of abatement, comprising over 40 per cent of the (target) cumulative abatement to 2020″.

To kick-start that choking of demand, electricity generation costs alone seem set to rise by between 50 per cent and 145 per cent over the period 2008-2015. And network costs (the costs of transmitting and distributing electricity) have been rising too.

Those costs, that account for about half the average household bill, have increased by 77 per cent since 2007-08. In large part, that reflects the cost of replacing network assets installed in the electricity investment surge that went from the late 1960s to the 80s.

But greater spending has also been driven by the need to strengthen the network to cope with rising peak demand.

And adding to the cost pressures, the NSW and Queensland Labor governments imposed tougher reliability requirements in the early to mid 2000s, following strong public reaction to widespread blackouts.

Unfortunately, exactly like the National Broadband Network, those tougher reliability standards were never subjected to cost-benefit appraisal.

Read More: http://www.theaustralian.com.au/opinion/columnists/pms-power-plan-cant-fix-shock/story-fn7078da-1226528456409

Power price rises foreshadowed in wake of PM’s plan to cut bills

admin — Tue, 04 Dec 2012 02:15:02 +0000

It seems that Julia Gillard’s plans to save consumers $250 a year on power bills may already have been sandbagged in NSW. It’s due to plans for more price rises for many consumers in the very state which Federal Labor has identified as crucial to its hopes for re-election next year. Energy Australia, one of the biggest electricity suppliers, has outlined plans to put prices up by 10.5 per cent over the next three years.

Here More: http://www.abc.net.au/news/2012-12-03/power-price-rises-foreshadowed-in-wake-of-pms-plan/4405588?section=business

Solar and wind could offer ‘cheaper power than coal’

admin — Fri, 30 Nov 2012 01:30:46 +0000

THEY account for less than 4 per cent of our electricity generation now, but solar and wind could be cheaper than coal by 2030, according to the Climate Commission.

Chief commissioner Professor Tim Flannery said rooftop solar panels may already be cheaper than conventional electricity in areas with high power prices, such as south-west Western Australia, and some regional areas.

Solar generates about 0.3 per cent of the nation’s electricity and he said the industry was set to boom as costs fell and markets expanded in places like India and sub-Saharan Africa.

”If you had looked at penetration of mobile phones into the market 15 years ago, you would have seen a similar sort of thing,” he said. ”These technological changes can happen incredibly quickly.”

About 754,000 households and businesses have installed solar panels.

”I think a lot of people are saying ‘why would we be hostage to ever increasing electricity prices’?” Professor Flannery said. ”The price of production has dropped 75 per cent in four years, this is now affordable technology.”

Australia aims to generate 20 per cent of its energy through renewables by 2020. That figure is now about 10 per cent, two-thirds of which comes from hydroelectricity, nearly a quarter from wind and 3 per cent from solar.

The Generating a Renewable Australia report to be launched on Monday in Sydney by Professor Flannery and fellow author, Climate commissioner Professor Veena Sahajwalla, reiterates that global carbon dioxide emissions will need to be near zero by 2050 to ensure a two-thirds chance of keeping the planet’s average temperature less than 2 degrees above pre-industrial levels.

Macquarie eyes smart meter rollout

admin — Thu, 29 Nov 2012 01:35:51 +0000

IF THERE is money to be made in government-regulated assets such as toll roads, electricity and gas, it does not take long for Macquarie Bank to show its hand.

And with the likelihood of a rollout of smart meters in NSW, the bank is only too keen to help. The introduction of the meters is under way in Victoria and this week the NSW government disclosed it had established a working party to study their introduction in NSW.

So-called smart meters can be read remotely and the power supply also controlled remotely. As a result, they promise significant savings for power companies, but with uncertainty about their benefit for most households.

But the poor experience in Victoria, where the cost of the rollout has risen to more than $2.3 billion, from the initial estimate of $800 million, and a lack of household benefit from the move, threatens to derail the proposal in NSW before it gets off the ground.

Recently, the power industry overseer, the Australian Energy Markets Commission, opened the door to the possibility of taking meters out of the hands of the power distributors and putting them into independent management, in a bid to drive change.

Macquarie Bank, for one, reckons electricity retailers are the natural owners of the meters, since they already hold the supply contracts with electricity consumers.

This would involve taking the metering business out of the hands of the distributors, such as Ausgrid and Endeavour Energy in NSW, or Citipower, Jemena or Powercor in Victoria, in favour of having the retailers such as EnergyAustralia, Origin Energy and AGL run it.

In a submission to the Productivity Commission review of electricity networks, Macquarie argued power retailers were better placed to assess and manage the risk of the introduction of meters – and face the loss of customers and market share if they have an uncompetitive product.

For most power users, the lack of clear benefits from smart meters means there is natural concern that their introduction will emerge as a new revenue stream for power companies.

Coming as electricity prices are surging to fund an upgrade to the electricity network, without readily identifiable positives, resistance will be acute.

CLIMATE SPECTATOR: Australia’s smart meter snag

admin — Thu, 29 Nov 2012 01:12:39 +0000

A report released by Smart Grid Australia reveals that government and energy companies face a huge task ahead educating and persuading consumers/voters of the merits of smart meters and time-varying pricing.

This is bad news for the federal government whose energy white paper has pretty much hung much of its hope on time varying pricing as the recipe for containing peak demand and electricity costs, with little emphasis on alternative measures such as an energy efficiency credits scheme and other dedicated measures to encourage demand management.

The chart on the left below, taken from the Smart Grid Australia report, reveals that a third to almost a half of consumers haven’t even heard of smart meters, except for in Victoria which has had a mandatory roll-out over the past few years. Unfortunately while Victorians are certainly aware of smart meters, the chart on the right reveals that a large proportion of the population tends to have an unfavourable view about them. For the other states consumers tend to have a neutral view, probably because they haven’t really thought about them.

The poor experience in Victoria it appears has served as a loud and rude wake-up call to electricity businesses and government about energy consumer behaviour and attitudes.

Reading through this report from Smart Grid Australia, what you read between the lines is that energy companies know there’s a need for greater use of demand management, but they’re struggling to deal with an apathetic and grumpy consumer.

Jemena blames politics for smart meter confusion

admin — Wed, 28 Nov 2012 01:59:21 +0000

Update One of the largest network operators in Victoria has criticised state governments in Victoria and New South Wales over their handling of the debate about the roll-out of smart meters.

Jemena, which provides electricity to 319,000 homes and businesses across north-west Melbourne, said the Victorian government under Ted Baillieu had failed to back the $2.3 billion program for political reasons.

An earlier version of the program introduced by Labor premier John Brumby used simpler devices and would have cost $850 million.

The larger sum, along with Wonthaggi desalination plant and the Myki transit card, became key election fodder for the Coalition and they have continued to wield it, Scott Parker, Jemena’s general manager corporate affairs, said.

The government was happy to attend launches of online portals by firms such as Jemena that show how households could save money from the meters, he said.

“But it won’t get up there and defend the integrity of the program, and will still call it a program whose budget blew out under the previous government – and no such thing happened – but it’s not in their political interest to say otherwise.”

Victoria’s Energy and Resource Minister Michael O’Brien, though, said the state’s Auditor-General had found a “massive smart meter cost blowout” during the former government’s watch.

“The Coalition Government independently reviewed the program,” Mr O’Brien said in a statement. “As a result we are reining-in the costs and bringing forward the benefits of smart meters to consumers.”

The Baillieu government decided a year ago to proceed with the mandatory state-wide introduction of the intelligent metering device – which provides two-way communication between the consumer and the energy provider – but had provided textbook “learnings” that other states would do well to study, Mr Parker said.

“The big thing was that smart meters needed to be rolled out in conjunction with time-of-use pricing … so that people can see the benefit.”

Instead, the government introduced a moratorium on more flexible pricing in the state six months after the first meter installed, leaving consumers confused and opposed to the meters. From next July, Victorians will have the option to choose variable pricing from peak to shoulder and off-peak rates.

“The Coalition Government is determined to make smart meters start to pay their way, after years of mismanagement by Labor,” Mr O’Brien said.

“Victoria will be the first State to introduce widespread access to flexible pricing and off-peak rates from mid-2013″.

First electricity, now we face big rise in gas prices

admin — Tue, 27 Nov 2012 22:59:48 +0000

THE impact of the resources boom is soon to be felt by NSW households as surging gas prices from export projects in Queensland force up household gas bills.

AGL has applied to the NSW government pricing regulator IPART, the Independent Pricing and Regulatory Tribunal, to raise gas prices by an estimated 10.4 per cent from mid-next year, with further steep, although unspecified, price rises expected over the following two years.

Rising gas exports from eastern Australia will push up domestic prices since international prices are more than twice as high.

The impact is compounded by the fact that AGL’s long-term gas purchase contracts from producers are expiring over the next few years, leaving it fully exposed to an expected surge in gas prices.

As it has yet to finalise its new gas purchase contracts, AGL has not indicated the likely rise in gas prices that will occur in 2014-15 and 2015-16 in its application to the regulator.

The rises come in the wake of large rises in electricity prices, with increases of up to 20 per cent taking effect from July 1 just the latest.

Australia Phases Out Solar Credits Early to Curb Power Bills

admin — Tue, 27 Nov 2012 01:05:13 +0000

The Australian government said it will phase out a solar incentive program in January, six months earlier than scheduled, to cut electricity bills for homes and businesses next year by as much as A$100 million ($103 million).

The decision “will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar” systems, Climate Change Minister Greg Combet said today in a statement.

The government program provided additional support for small-scale solar power by multiplying the number of certificates the systems would create under the government’s Renewable Energy Target, according to the statement.

The early removal of the incentives is a “decisive and positive step by the government toward minimizing the cost burden of the renewable energy target on Australian families and businesses,” Origin Energy Ltd. (ORG), Australia’s largest electricity retailer, said in an e-mailed statement.

The Sustainable Energy Association of Australia said the decision was “untimely and unnecessary.” Electricity regulatory reform would dwarf savings from the government’s announcement today, according to the industry group, which represents companies from Rio Tinto Group to Wesfarmers Ltd. (WES)

Renewables to dominate ‘within decades’

admin — Mon, 26 Nov 2012 02:37:34 +0000

CHIEF climate commissioner Tim Flannery believes Australia will be generating 100 per cent of its energy from renewable sources within decades.

At the moment renewables such as hydroelectricity, wind and solar power account for 10 per cent of Australia’s energy mix. That figure is expected to rise to 25 per cent by 2020.

But Professor Flannery insists there’s “no doubt” Australia will end up with 100 per cent renewables sooner rather than later.

“It’s only my gut feeling, but I would say (it will happen) within decades and not many,” Prof Flannery told AAP, adding that prices were coming down and penetration was growing “massively”.

The Climate Commission on Monday is to release a report examining renewable energy in Australia.

It suggests there is enormous potential but so far it’s under-utilised.

“Solar PV and wind could be the cheapest forms of power in Australia for retail users by 2030, if not earlier, as carbon prices rise,” the report states.

“The rate of growth of wind energy is well above any other large-scale generation source, growing at an average of 40 per cent each year over five years to 2009-10.”

Prof Flannery said the situation was similar to what was happening in the media where historically there’d been a few large generators of news and many consumers.

“But the internet means there’s now a whole lot of producers and a whole lot of consumers,” he said.

“The electricity sector is going the same way. We led the world in terms of small installations of PV (solar) last year.”

Smart move – but consumers pick up the costs

admin — Mon, 26 Nov 2012 02:04:44 +0000

DO WE really want to check our smart meters every time we turn on the dishwasher, take a shower or toast a slice of bread?

Has anybody wondered why almost every power company and lobby group in the country is pushing for the introduction of smart meters? It is worth pondering, for government, it seems, is about to fail the public again over energy policy.

First it was a faulty regulatory system which gave rise to ”gold-plating”, or overspending on networks, and spiralling power bills. The increase in ”peak demand” remains the industry catch cry to rationalise its rampant spending, even though peak demand has actually been falling for three years.

But as the myth of peak demand is now harder to propagate, industry is pushing for smart meters. The smart meter is the next big ruse.
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Smart meters and ”flexible pricing” merely shift the business risk from the company to the consumer. Like mobile phone bills, their sheer complexity will enable the promoter to game the customer.

Who will pay for the devices? Who will pay for the software upgrades? Where should the metering company sit, in an offshore structure? Should the device be company-specific?

The power lobby has done a first-rate job of spruiking the smart meter regime to governments so far, despite the issues in Victoria, the only state where they have been installed.

”In my view, smart meters combined with flexible tariffs are the next ‘gold-plating’,” says Bruce Robertson, the industry critic from consumer activist group Manning Alliance who exposed the ruse of overspending.

”The generators already game the NEM (National Electricity Market) by withholding supply at peak times and so on. Smart meters combined with time-of-use pricing open up a whole new range of gaming possibilities.”

The consumer takes on all the business risk for a start, says Robertson. If a power station, for example, suffers an outage for whatever reason, consumers pick up the cost.

Wholesale electricity prices can be extraordinarily volatile (they can be as high as $12,500 per megawatt; although, perversely, the price per megawatt-hour can also be negative). Under a flexible pricing regime the customer pays for this, says Robertson.

”Just how much fun is it to get the family together to eat a turkey at Christmas only to find it will cost $50 to roast it because some technician at a power station dropped a spanner in the works?”

This story really only deals with the economic and market aspects of the smart meter. There is a human cost. In lifestyle terms, the implications of constantly checking, or worrying about not checking a meter, will affect a lot of people.

AGL readies biggest wind farm in southern hemisphere

admin — Fri, 23 Nov 2012 00:20:05 +0000

AGL Energy, Australia’s largest operator of renewable energy projects, expects its $1 billion Macarthur wind farm to be operating fully in February as the country seeks to reduce its’ reliance on coal.

“It’s on time, on budget and, in fact, may well be completed a little ahead of schedule,” Managing Director Michael Fraser said.

Sydney-based AGL and partner Meridian Energy are starting the 420-megawatt Macarthur project in Victoria, the largest wind farm in the Southern Hemisphere, as Australia moves toward its goal of getting 20 per cent of its power from renewable energy by 2020.

The company expected Macarthur to be completed by the end of March 2013, Fraser said.

AGL expects to get government approval for its Gloucester coal-seam gas project in New South Wales state early next year. It faced a blockade last year at that project organized by environmental protester, farmers and politicians who were concerned that drilling for the gas would damage aquifers and contaminate and deplete water supplies.

“We’ve still got people who are protesting, but we’re not being blockaded,” Fraser said. “We’re getting on with the job. If we don’t develop new sources of gas, I don’t know where New South Wales is going to get the molecules from come 2017.”

Surging gas price

The Australian electricity and gas retailer expects the New South Wales government to decide early next year whether to approve its plan to expand the Camden natural gas project.

With natural gas prices on the east coast of Australia projected set to double and the government’s price on carbon emissions discouraging fossil fuels, the cost of gas-fired power stations may converge with that of wind farms, he said.

Alcoa invests to secure energy supply

admin — Wed, 21 Nov 2012 22:46:43 +0000

INDUSTRIAL giant Alcoa of Australia is set to expand further into the energy sector, continuing a trend for big power consumers to seek direct exposure to oil and gas explorers.

Just days after Fortescue Metals Group was revealed to be negotiating a stake in a shale gas explorer, Alcoa of Australia boss Alan Cransberg revealed his company had spent close to $200 million on exposure to local energy explorers and was likely to make further investments.

Energy security is a crucial issue for Alcoa, with the company’s assets understood to consume 20 per cent of Victoria’s electricity and about 24 per cent of Western Australia’s gas supply. The company has enjoyed decades of cheap energy, thanks to government subsidies and has had almost 95 per cent of its carbon tax exposure waived, albeit temporarily, by the Gillard government.

Speaking in Melbourne, Mr Cransberg said Alcoa had exposure to three ASX-listed energy companies, with deals in place with Empire Energy, market darling Buru Energy and $31 million shale minnow Transerv. ”So far we have invested somewhere between $100 million and $200 million, it is a significant investment and we will continue to invest,” he said.
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”We’ll continue to look at opportunities and the right investment, given we’re a long-term player.”

Alcoa is not listed as a major shareholder in any of the companies and its exposure is understood to be in the form of funding to assist in infrastructure development.

Mr Cransberg said the investments were designed to reduce Alcoa’s exposure to future rises in energy prices and to improve security of supply. ”We are well set up for the next decade, but in these sorts of areas you have got to start worrying about these things now,” he said.

Electricity costs set to soar 15 per cent

admin — Tue, 20 Nov 2012 23:05:55 +0000

THE International Energy Agency (IEA) says electricity prices around the world are expected to rise by up to 15 per cent over the next decade.

IEA executive director Maria van der Hoeven says while there would be some regional differences, there would be a double digit increase globally.

“Electricity prices are expected to increase everywhere in real terms over the coming decade by 15 per cent on average,” Ms van der Hoeven told the Australian Institute of Energy national conference in Sydney today.

“That’s principally due to rising fuel prices and also due to renewable (energy) subsidies. Where renewable subsidies are passed onto consumers through electricity prices, the additional tariff component can be substantial.”

Ms van der Hoeven said electricity prices were highest in Japan and the European Union, well above those in the United States and China, due to higher fuel costs and higher capital costs and renewable subsidy costs.

Coal would remain the leading global fuel for electricity generation, given its use by the rapidly growing economies of China and India, among others, Ms van der Hoeven said.

Renewable resources would be the world’s second largest global fuel for power generation by 2015, overtaking natural gas, she said.

“After a period of very strong growth, renewable energy resources have reached a crossroads as some governments look at the undoubted benefits, yes, but also look critically at how renewables are being supported and how much that is costing,” Ms van der Hoeven said.

Electricity bill complaints on the rise

admin — Tue, 20 Nov 2012 22:51:41 +0000

The Energy and Water Ombudsman says there has been a 43-percent increase in complaints relating to energy bills over the last 12 months.

The Ombudsman’s annual report shows that consumers are having problems with high bills, customer service and affordability.

There are also rising numbers of people being given bad credit ratings for unpaid bills of hundreds of dollars.

The NSW Energy and Water Ombudsman Clare Petre says she is very concerned about the high number of complaints from customers who had their power cut off or were facing disconnection.

“People were disputing their bills, they were unable to pay their bills, they were facing disconnection or had already been disconnected, they were being subjected to debt collection or credit default listings,” she said.

“So there was whole range of complaints but they mostly related around energy affordability in many cases.”

She also says it is unfair that some people are being given bad credit ratings for small amounts of debt.

“We think it’s appalling and we’ve called for the amount of credit default listing to be raised because it’s a disproportionate impact for people to be credit listed for five years for a debt of a couple of hundred dollars,” she said.

“It just doesn’t seem fair to us and we’ve been strongly calling for that to be changed.”

She says consumers who are facing disconnection should get in touch with their energy provider to discuss their situation.

Solar scheme shift stuns industry

admin — Mon, 19 Nov 2012 03:15:31 +0000

A rebate for rooftop solar panels will be halved six months earlier than planned in a move blasted by an industry group as “diabolical”.

Climate Change Minister Greg Combet announced the solar credits scheme would end in January next year “due to continued strong demand for household solar”.

In a statement, Mr Combet said the subsidy cut was expected to save households between $80 million and $100 million on electricity bills next year.

“Phasing out the [scheme] early will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar PV,” he said.

According to the government’s figures, the level of support for a 3-kilowatt solar panel system will fall about $800-$1,000 across most state capitals. The current assistance for such a unit drops from $2,976 in Sydney to $1,984 from January 1, while the fall in Melbourne is from $2,528 to $1,696.

John Grimes, chief executive of the Australian Solar Council, said the surprise move would hit jobs and put solar PV out of reach for many middle-class households seeking relief from soaring power bills.

“People refer to this as the solar-coaster ride,” Mr Grimes said. “Our standing joke is that a day is a long time in solar policy.”

The acceleration of the rebate reduction comes as the government is under increasing pressure from the power industry to modify its 20 per cent renewable energy target (RET).

Current projections suggest renewable energy supplies will exceed the goal of a 20 per cent share of total supply by 2020.

Renewable energy advocates warn that tinkering with the target would place at risk as much as $18 billion in additional investment in solar, wind and other non-fossil-fuel energy sources by the end of the decade.

‘Desperate’

Ric Brazzale, president of the REC Agents Association, said solar PV installations were on course to drop from 350,000 in both 2011 and 2012, to 230,000 in 2013 as state feed-in tariffs were wound back. That fall is now likely to accelerate, he said.

‘‘The industry is desperate for some policy stability,’’ Mr Brazzale said.

The renewable energy industry has been building a critical mass in terms of scale and innovation capacity that is now at risk: ‘‘It’s just so wasteful to risk throwing it away.’’

Mr Grimes said solar PV prices had been falling fast because of a flood of low-cost production from China, but the reductions may not continue as the Chinese industry consolidates and loss-making firms go bust. Some 15,000 people are employed in the industry, he said.

But Rheem, Australia’s largest producer of solar hot water systems, welcomed the announcement, saying it would ”create a level-playing field for all solar hot water producers”.

The renewable industry’s peak lobby group, the Clean Energy Council, said today’s decision should “erode all arguments” for further changes to the RET.

‘‘We would have expected the government to have more regard for the sense of investor uncertainty today’s announcement creates, right at the time when both major parties are seeking to demonstrate that Australia is a reliable place in which to invest, with stable and consistent market rules,’’ Russell Marsh, the council’s policy director, said.

“While it is appropriate that governments continue to review the level of incentives, it’s important that this is handled carefully and timed sensibly,” Mr Marsh said.

The power game: electricity’s winners and losers

admin — Mon, 19 Nov 2012 00:15:02 +0000

The way electricity prices are surging, there should be some high-voltage returns from power companies.

Well, you’d think so.

But the generators are struggling with – you’re not going to believe this – falling wholesale prices.

So it must be further down the wires where the money is being made.
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How about the companies that bill you, then? A few are listed: Australian Power and Gas , ERM Business Energy and Infratil.

But on their recent form it can’t be them, either. One runs at a loss and the already modest profit of the other two is falling.

They’re getting their power supply more cheaply except there’s, uh, a leakage. Thanks to ferocious competition for customers, what they gain on the swings, they lose on the roundabout.

NOTE THE NETWORKS

That leaves the network – the companies with the transmission towers and wires strung from them – and there’s the rub.

Most of them aren’t in private hands, but are government owned. Bummer.

The only listed stock that is mostly an electricity network supplier is SP AusNet, although it also sells gas.

It’s the biggest holding of fund manager Allan Gray, but even that’s due to the dividend, not the prospect of a price surge.

Yielding 7.7 per cent, it comes with a small tax break as it’s one-third franked.

So if you bought the stock at its current price, the pre-tax yield would be about 8.7 per cent – way above what you’d get on a term deposit.

“It’s a stable, basic business that does nothing fancy. It seems to do quite well,” Allan Gray’s Simon Marais says.

A senior analyst at Morningstar, Adrian Atkins, says SP AusNet “looks modestly undervalued”.

One reason it’s been marked down is litigation over the 2009 Victorian bushfires, which will probably be covered by insurance but might not be counted by the regulator in setting its return. As you’ll see, rules and regulations for the electricity industry are in a world of their own, with often bizarre consequences.

PROBING THE GIANTS

No, the real money is in the two network giants of Origin Energy and AGL Energy, and running an electricity network isn’t even their biggest business.

They operate under some very odd rules set by the states that control how much they can earn. Or, at least, they are supposed to.

One idiosyncrasy is that lower interest rates should cut profits in the view of the regulator. This is by stint of a revenue allowance based on how much they’ll be spending. So lower interest requires less revenue. Get it?

Naturally, the way around regulations that penalise lower costs is to erect more towers and wires so more revenue is needed and so a higher tariff becomes essential. Should you ever get up close to one of those towers, not that I recommend you try, let me know if it’s gold-plated with platinum wires.

There are more than 1300 pages of rules, the 51st version in six years, set by a Beijing-sounding Standing Council on Energy and Resources along with separate state and federal regulators who would only agree what day it was purely by coincidence.

Not even the banks have their return regulated, as you’ve probably noticed.

THOSE PESKY PRICES

A plethora of government reports and inquiries, along with mounting pressure from politicians, suggests the rules are going to change eventually, though goodness knows in which direction.

‘The challenge will be the massive asset base they work with,” the chief executive at Lincoln Indicators’, Elio D’Amato, warns.

As the biggest power supplier, Origin Energy is loved by super funds because it does everything from producing gas and electricity to connecting customers.

Here’s the bad news. The shares have slumped to a five-year low on a forecast fall of 10 per cent in its underlying profit for 2012-13 after Queensland played hard ball over power prices.

If you’ve got your head around falling wholesale but rising retail power prices, you’re ready for what’s next. If you haven’t, just try to keep up.

It turns out that rising retail prices aren’t good for the power companies.

The reason is that demand falls as a result, and selling power is all about volume. In fact, demand has been falling for a few years, due to rooftop solar panels, the dollar gutting manufacturing and miners generating their own power.

Oh, and because of the higher prices, turning the airconditioner down does wonders for the household’s cash flow.

So the more politicians control electricity price rises, the better for Origin and AGL.

One man v the system: power industry says sorry

admin — Fri, 16 Nov 2012 01:46:14 +0000

IN THE morning, Bruce Robertson and his family were facing a lawsuit from six state electricity giants. By early afternoon, they were fielding an apology.

Grid Australia, the peak body representing the nation’s $10 billion transmission industry, had threatened to sue the cattle farmer for defamation.

As an outspoken critic of the power companies, Robertson had exposed their inflated forecasts for electricity demand, and the ”gold-plating”, or excessive spending, which has been the driving force behind the rise in electricity bills.

After revelations about the lawsuit in the Fairfax press however, an outcry of public support for the farmer from the mid-north coast of NSW forced an embarrassing back-down.

”I’m still confused. One minute I’ve got a lawsuit on my hands, the next minute I’ve got an apology. What’s going on?” said Robertson.

The chairman of Grid Australia, Peter McIntyre, wrote to Robertson to ”sincerely apologise”. The threat of defamation proceedings had been withdrawn, he said, inviting Robertson to meet and discuss the issues.

Electricity sell-off gets tick of approval

admin — Fri, 16 Nov 2012 01:22:30 +0000

The Chairman of the Energy Users Association says the New South Wales Government sell-off of electricity generators will help reduce power bills in the south east.

The government announced this week that the sale will free up to $3b for infrastructure spending.

The Chairman, Brian Green said the move is the right option.

“I think it’s the right way to go. It’s really finalising a process that was started by the previous administration in New South Wales,” he said.

“We would see private ownership of the generators assist in competition and eventually driving prices down.”

Mr Green said the plan will help increase competition.

Read More: http://www.abc.net.au/news/2012-11-16/power-sell-off/4375902?&section=news

Coalition renews campaign blaming carbon tax for soaring electricity bills

admin — Wed, 14 Nov 2012 03:36:48 +0000

THE Coalition has seized on claims newly re-elected US President Barack Obama has ruled out introducing a domestic carbon tax to renew its attack on Australia’s rising electricity prices

The Opposition’s environment spokesman Greg Hunt cited a report on the United States political blog The Hill which quotes a White House official declaring: “The Administration has not proposed nor is planning to propose a carbon tax.”

The report states that a carbon tax had been flagged by some economists in discussions about how the debt-laden superpower could raise revenue and avoid the so-called fiscal cliff.

“The push for a US Carbon Tax had been promoted as a revenue raising measure,” Mr Hunt said.

“As an environmental policy to address climate change, the Carbon Tax is flawed as it simply drives up electricity and gas prices,” he said.

A spokesman for Climate Change Minister Greg Combet said the US has already pledged to reduce its greenhouse gas emissions by 17 per cent below 2005 levels by 2020 and was currently taking “significant action” to reduce its greenhouse gas emissions.

Rising electricity prices increase retiree burden

admin — Tue, 13 Nov 2012 02:26:52 +0000

A spike in electricity prices has made it harder for Australians to achieve a comfortable retirement, the Association of Superannuation Funds of Australia (ASFA) said.

ASFA’s Retirement Standard revealed that in the September quarter, a couple’s ‘comfortable’ retirement would cost $56,236 a year, 1.7 per cent up on last year, while a ‘modest’ retirement would cost $32,511 annually, an increase of 2.3 per cent.

Electricity prices increased by 15.3 per cent and were fingered as a major contributor, along with a 5.8 per cent increase in property rates and charges, which the Australian Bureau of Statistics (ABS) said was a result of investment into infrastructure and the introduction of carbon pricing.

The increase in the minimum dollar figure, between the June and September quarters, for those seeking a comfortable retirement and those pursuing a modest retirement was substantial, ASFA said.

Origin warns of higher power prices

admin — Mon, 12 Nov 2012 03:49:19 +0000

ORIGIN Energy chairman Kevin McCann says households will be worse off if state governments continue to regulate electricity prices.

A deregulated market, such as the model that operates in Victoria, provided the best outcome for consumers, Mr McCann told shareholders at Origin’s annual general meeting in Sydney on Monday.

Origin is Australia’s largest electricity retailer.

“In Queensland, New South Wales and South Australia, state governments are still regulating electricity prices, long after price controls were removed from other household staples such as milk and petrol,” Mr McCann said.

“Actions by state governments that seek to cap or hold retail prices artificially low will have unintended impacts, including stifling future investment in generation and significantly lessening competition for consumers.

“We look to governments to support and promote competition and innovation.”

Mr McCann said Victoria’s deregulated market was the most competitive in the world, as measured by the number of people who switch between retailers.

Reform package pushes gas as new energy leader

admin — Fri, 09 Nov 2012 00:36:01 +0000

AUSTRALIA could become the world’s biggest gas exporter but its domestic use of fossil fuels will decline as the carbon tax drives a gradual switch to renewables such as wind and solar, the government’s energy white paper says.

The long delayed paper, released on Thursday, urges the deregulation of electricity pricing and the roll-out of smart meters, which give businesses and households greater ability to use cheaper, off-peak electricity, as part of a package of reforms to curb soaring power prices.

It also calls on state and federal governments to put in place regulations to overcome environmental and local objections to the coal seam gas industry so that coal seam gas reserves can be fully exploited.

The paper predicts a possible shuffling of global rankings of energy production, suggesting Australia could ”rival” Qatar as the world’s biggest gas exporter as gas exports surge by a massive 19 per cent per year.

Higher power bills flagged in energy white paper

admin — Thu, 08 Nov 2012 01:08:57 +0000

Consumers who use lots of power at peak times could soon be forced to pay more for electricity, as part of the Federal Government’s plan to cut energy consumption and create a fairer billing system.

Energy Minister Martin Ferguson say there is no quick fix to counter the energy price rises of recent years, but he is challenging the states to introduce reforms which might ease some of the pain.

Today he releases the Government’s long-awaited energy white paper which calls for an overhaul of electricity pricing and for innovations to allow customers to better manage their energy use.

“Pricing structures are resulting in inefficient peak demand,” Mr Ferguson will say in a speech to be delivered later today.

“This means that additional capacity is required to be built that might only be used for one per cent of the year.”

He says demand-based pricing and smart meters will help overcome that problem, and allow consumers to monitor their energy use more closely.

Mr Ferguson concedes that many of the ideas included in the white paper will need the cooperation of the states, and he is urging them to take a bipartisan approach to the issue.

“This will require making some hard decisions and sometimes overcoming populism for what is in the long-term interests of consumers,” Mr Ferguson will say.

The policy paper paves the way for tough negotiations between the Commonwealth and the states – the first is set for next month’s Council of Australian Governments (COAG) meeting.

Mr Ferguson will unveil the white paper in Victoria – a state he says is a model for energy sector reform.

His Opposition counterpart Ian Macfarlane has welcomed the move.

“Victoria now boasts the lowest transmission charges in Australia because there is a privatisation of the network,” he said.

“So we need to encourage the states but you won’t get the states to do what needs to be done by politicising the issue as Julia Gillard has done or by waving a big stick at them.”

Labor takes aim at power bills

admin — Wed, 07 Nov 2012 23:08:05 +0000

The Australian: The major shake-up which would do away with retail price controls set by state-based regulators and allow energy retailers across the nation to set their own charges will be hammered out by Julia Gillard and state leaders at next month’s meeting of the Council of Australian Governments.

It could involve a roll-out of smart meters, which would allow consumers to avoid high tariffs during peak periods such as hot spells in summer.

Releasing the final energy white paper today, Resources and Energy Minister Martin Ferguson will also reject policies of reserving gas for local industry and declare that Australia must cut the costs on resources projects if a $230 billion pipeline of works is to be delivered.

Cost of energy target revised downwards

admin — Fri, 02 Nov 2012 00:20:01 +0000

A MODELLING error has forced the Climate Change Authority to significantly revise down its cost assessment of the renewable energy target on the average Australian household.

The correction from $104 to $62 in extra costs for the 2012-13 year came after Labor’s chief whip, Joel Fitzgibbon, said consideration should be given to lowering the target given the introduction of a $23-a-tonne carbon price.

There is at present bipartisan support for the RET to make up 20 per cent of Australia’s electricity production by 2020 and Climate Change Minister Greg Combet has said the measure works alongside the carbon price to drive investment in renewables.

“The modelling for the Climate Change Authority indicates that the compliance costs of the RET go up by an additional $13.2 billion to 2030 if the carbon price was repealed,” Mr Combet’s spokesman said.

Interest in Origin’s Victorian wind farm

admin — Thu, 01 Nov 2012 04:52:31 +0000

The three groups are General Electric Co and Downer EDI Ltd, Leighton Holdings Ltd and Suzlon Energy Ltd’s subsidiary REpower Australia, and Xinjiang Goldwind Science & Technology Co and China Three Gorges New Energy Corporation, sources said.

The sale entails the outright purchase of the project, which includes the development and construction of 157 wind turbines in Victoria as well as a power purchase agreement.

In May, Deal Journal Australia first reported that Origin was seeking proposals from parties interested in supplying wind turbines, constructing the wind farm, providing equity for the wind farm’s development or buying the project in its entirety.

http://www.theaustralian.com.au/business/wall-street-journal/interest-in-origins-victorian-wind-farm/story-fnay3vxj-1226507858775

Business, charities unite for energy price campaign

admin — Mon, 29 Oct 2012 23:58:15 +0000

The Australian Industry Group, Brotherhood of St Lawrence and the Energy Efficiency Council have jointly commissioned a study into the factors that have driven power prices up more than 50 per cent in the past five years.

The report, prepared by Oakley Greenwood, finds that around a quarter of electricity costs are driven by “super peaks” – typically a few very hot or cold days when power consumption surges during peak periods.

The cost of extra infrastructure, both generation and transmission capacity, to deal with these peaks has pushed up power bills.

A key recommendation of the report, supported by the groups, is a proposal to enable consumers to sell demand response to the wholesale market during times of super peak demand.

Energy market needs urgent reform as prices soar

admin — Mon, 29 Oct 2012 03:11:09 +0000

A COALITION of industry groups and energy organisations have called on government to urgently reform the electricity market as power price hikes continue to bite.

The Australian Industry Group, charity Brotherhood of St Laurence, Choice and the Energy Efficiency Council commissioned an independent report – released today – by Oakley Greenwood which blames network infrastructure costs and the rise in coal and gas prices for the 50 per cent increase in power bills over the past five years.

The carbon tax played a part, too, though its role would diminish, according to the report.

“The most significant factor putting upward pressure on the cost of generating electricity is expected to be increases in the prices generators have to pay for the fuel they use due to increased exposure of Australia’s coal and gas resources to world prices,” the report states.
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“The introduction of the carbon price has had an impact on prices from its introduction in 2012. Its contribution to further price increases is expected to decrease given the current outlook for international carbon prices and the fact that the floor price has been removed.”

Farmer finds facts lost in transmission

admin — Mon, 22 Oct 2012 03:32:09 +0000

The emperor has no clothes. In fact, the emperor is butt-naked, disrobed by a cattle farmer from Burrell Creek – a place so small, its distinguishing features include a house, a community hall and a phone box … population not stipulated.

Four months ago – on hearing of a proposal to run giant transmission lines through his property – a farmer from the NSW north coast, Bruce Robertson, delved into the claims the power companies had been making about electricity prices. He found they were untrue.

Four days ago, the Productivity Commission corroborated what Robertson had been saying all along. That is, escalating power bills were principally the upshot of over-investment in electricity networks; not the carbon tax, not rising consumption.
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Now Robertson says the power lobby has even misled the Senate, by insisting the price rises are the fault of ”peak demand” and rising consumption. As he says in his submission to the Senate inquiry on electricity prices, demand has collapsed. Even so, Grid Australia, the peak body for the $10 billion transmission and distribution sector, has told the Senate that demand is rising.

”Demand is falling, not rising,” Robertson says. ”This basic premise is factually incorrect.”

Page four of the Grid Australia submission to the Senate cites ”key causes of electricity price increases over recent

years” as ”ageing infrastructure” and ”increase in demand”.

These are the ”recognised, industry-wide reasons that contribute to rises in electricity costs”, according to Grid Australia.

Electricity reforms could drive down power bills

admin — Sun, 21 Oct 2012 23:07:50 +0000

Household power bills would be reduced by up to $250 a year and the NSW government could save more than $1 billion in infrastructure spending under a raft of changes proposed to the electricity market including full privatisation, smarter regulation and more choice for consumers.

A report to be released today by the Productivity Commission backs the argument advanced by the Prime Minister, Julia Gillard, that the main driver of power prices has been spiralling network costs caused by overinvestment in poles and wires, rather than the carbon price.

It finds power bills have risen by more than 50 per cent over the past five years. Today 25 per cent of the revenue raised is required to provide the infrastructure ”to meet around 40 hours of critical peak demand each year”.

Gas export boom threatens electricity prices

admin — Thu, 18 Oct 2012 03:30:50 +0000

ABC News: A new report by the Australian Industry Group has found that on the east coast gas prices could triple in the next ten years, well outstripping any costs related to the carbon tax. The Group’s Innes Willox is warning there needs to be an urgent discussion about keeping Australian natural gas in country, rather than exporting vast quantities for sale in Asia. He says without keeping some local gas reserves, industry will be forced to rely on fossil fuels. Analyst Vlado Vivoda says Australia is the only major natural gas producer in the world which doesn’t keep a portion of its supply for its own domestic use.

Read More: http://www.abc.net.au/news/2012-10-17/murdoch-survives-investor-protest/4318288?section=qld

Brown out in coal power squeeze

admin — Tue, 16 Oct 2012 22:50:20 +0000

The Australian Today:

A MAJOR brown-coal power station in Victoria’s Latrobe Valley will cut production by operating only three of its four units, prompting new warnings that the federal renewable energy target is threatening the sustainability of the electricity market.

The Australian can reveal that Energy Australia will today announce it will scale back electricity generation at the Gippsland-based Yallourn power station. The company says the carbon price, which started on July 1, is driving up operating costs while wholesale electricity prices are weak and demand for electricity is plunging.

Tony Abbott on bill shock

admin — Thu, 11 Oct 2012 02:37:29 +0000

OPPOSITION Leader Tony Abbott was accused of misleading Parliament yesterday when he claimed a Perth pensioner had suffered a massive hike in her power bill because of the carbon tax when in fact the woman had doubled her electricity usage.

Mr Abbott used question time yesterday afternoon to resume his attacks on the carbon tax, producing a bill from a woman named Hetty Verolme, a resident of Perth whose latest bill had more than doubled.

‘With an $800 increase in just one bill, of which 70 per cent is due to the carbon tax, how can the Prime Minister possibly claim that Hetty’s compensation is in any way adequate?”
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He said the woman had ”nearly had a heart attack” when she saw her latest bill.

But scrutiny of the bill quickly and clearly shows that Mrs Verolme used approximately twice as much electricity over the most recent period compared with the previous one.

The bill from power firm Synergy also clearly stated that bills were going up by about 9.13 per cent because of the carbon tax.

Mr Abbott’s spokesman later said that the rate Mrs Verolme paid for electricity was going up a total of 12.63 per cent and therefore the 9.13 per cent carbon component was 70 per cent of the rise.

Read more: http://www.theage.com.au/opinion/political-news/abbott-suffers-bill-shock-20121010-27dkg.html#ixzz28x0G056S

Housing stress and energy poverty – a deadly mix?

admin — Tue, 09 Oct 2012 03:37:02 +0000

An article published a few weeks back on theconversation.edu.au, about energy poverty- a sad reality of expensive energy bills.

The well-being of low-income Australian households is being seriously undermined by the increasing cost of housing and electricity. Many such households are suffering from both housing stress and energy poverty.

Housing stress occurs when low-income households (the bottom 40% of households) use about a third of their income to pay for accommodation. Energy poverty, we suggest, occurs when low-income households spend 10% or more of after-tax income on household energy bills, in addition to rent or mortgage payments.

No Australian studies have examined the link between housing stress and energy poverty, and its effect on well being. But findings from our current research suggest that they often go hand-in-hand, and financial hardship is an ever present reality in the households concerned.

The extent of housing stress

The data on housing stress alone is well developed. The COAG Reform Council’s annual report on the state of housing in Australia, paints a dismal picture. In 2009-2010, 42% of low-income households in the private rental market were suffering from housing stress, up from 37% in 2007-08.

More than half of private renters in the lowest 10% of households by income were in housing stress during this period. The same report concluded that in 2009-10, 37% of low-income households with a mortgage were also suffering from housing stress.

The extent of energy poverty

The proportion of low-income households suffering from energy poverty is less clear. What is evident is that increases in electricity prices have far outstripped inflation and wage increases.

An Australia-wide snapshot of average electricity price increases over the past five years shows that New South Wales household electricity prices rose 80%, Queensland, South Australia and Tasmania by 60%, and in Western Australia by 57%. Over the same period the Consumer Price Index rose by 14.5%, and average weekly earnings by over a quarter.

Pricing Trial for Power Savings

admin — Mon, 08 Oct 2012 04:08:22 +0000

Electricity users in selected New South Wales areas will be invited to take part in a new trial aimed at giving consumers greater control over their energy use and providing them with opportunities to cut their energy bills.

The Minister for Resources and Energy, Martin Ferguson AM MP, welcomed the trial and said it is vital that we investigate new ways to help consumers gain more control over their electricity use.

Minister Ferguson also welcomed EnergyAustralia to the Australian Government’s Smart Grid, Smart City Project which today announced it has signed up as the retail partner to the project.

The trials by EnergyAustralia are part of the $100 million Smart Grid, Smart City project and include discounts for paying power bills early, rebates for consumers choosing to have their air-conditioning adjusted at peak periods and technology to help households track energy costs.

As part of the power pricing trials, customers can gain access to in-home displays, web portals, smart phone applications, home energy monitoring and direct load control devices while being offered a range of energy tariffs and rebates designed to empower consumers with greater information to change the way they use electricity and reduce costs.

Household Energy Use on the Rise

admin — Tue, 02 Oct 2012 01:07:44 +0000

Given the billions of dollars of investment going into green building and energy efficient appliances in Australia, it would seem logical that household energy consumption – at least on a per capita basis – would be on wane.

According to the latest survey results from the Australian Bureau of Statistics (ABS), however, that is not the case.

Indeed, the latest issue of Australian Social Trends released by the ABS on September 26 indicates that Australian households are using 25 per cent more electricity and 22 per cent more gas than they were 10 years ago, and that overall, excluding petrol, households used 14 per cent more energy in 2010/11 than what they did in 2000/01.

To be sure, almost all of this increase can be explained by an expansion of the population from an estimated 19.153 million in 2000 to 22.298 million in 2010.

Power bills could drop in industry shake-up

admin — Mon, 01 Oct 2012 03:35:49 +0000

POWER bills could be lower next year under a move to make the electricity and gas industries more competitive.

The State Government announced yesterday that over the next three years, homeowners could pay less for power than the rates set by the Independent Pricing and Regulatory Tribunal.

Energy Minister Chris Hartcher said it would lower bills and be better for the industry.

“If our terms of reference were in place this year, regulated retail prices would have been about 2 per cent lower,” he said.

“The former government locked in terms of reference that set the regulated price too high. We want to allow for more flexibility to place downward pressure on electricity prices while still allowing for a competitive market.”

Electricity and Australians’ power of choice

admin — Tue, 25 Sep 2012 04:35:01 +0000

Electricity prices are a hot topic. Prices have skyrocketed in recent years and politicians have finally realised that people are struggling to pay energy bills.

Power of Choice, an Australian Energy Market Commission report, focuses on measures to assist all consumers better manage their demand for electricity. It was requested by the federal, state and territory ministers responsible for energy.

There is much to commend here, although for many this report will be as complex as the composition of electricity prices and the reasons for price increases. It reflects how complex the regulatory regime has become for Australia’s electricity market.

Electricity hikes not all carbon tax: Combet

admin — Mon, 24 Sep 2012 04:51:07 +0000

RISING electricity prices continue to dominate the concerns of producers but the carbon tax’s contribution is comparatively small, according to one of its chief proponents.

Federal Minister for Climate Change and Energy Efficiency Greg Combet told the Australian Meat Industry Council business conference held in Adelaide earlier this month that the tax’s effect on electricity prices only had a 0.2 per cent impact on the Consumer Price Index.

“Electricity prices have gone up very significantly in recent years – 55 per cent in NSW in three years – and just shy of 50pc across the whole economy in the past three years,” he said.

“The carbon price impact, on average across the country, has resulted in a 10pc increase in electricity prices.

“No increase is welcome but we have to keep it in perspective.”

Mr Combet said prices were mostly attributable to rising supply maintenance costs and energy rebate schemes.

He was particularly scathing of state-government subsidies for the installation of solar panels, which are financed through higher electricity prices.

“I don’t like those schemes because they are inequitable and a very costly way of reducing emissions,” Mr Combet said.

“We need reform, a review of contributing factors to the electricity market and how they can be addressed, and the extent to which state governments pay dividends.”

But Murray Goulburn Co-operative shareholder relations general manager Robert Poole says the carbon tax’s total impost on the company will be $14.1 million a year, or $5000 per dairy farmer.

Smart meter data shared far and wide

admin — Mon, 24 Sep 2012 04:36:51 +0000

DETAILED information about electricity customers’ power usage, which gives insights into when a house is occupied, is being shared with third parties including mail houses, debt collectors, data processing analysts and government agencies.

Customers with smart meters who sign up for Origin Energy’s online portal must consent to their data being shared with a string of third parties. The data is stored in Australia but shared with US company Tendril, which is described by Origin as a smart energy technology provider.

Australia’s privacy watchdog said the technology could threaten people’s privacy. ”We are starting to see people voicing concern about the level of data that these meters can collect,” federal Privacy Commissioner Timothy Pilgrim said.
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Smart meters were a common concern among Age readers who responded to our series on privacy.

Read more: http://www.theage.com.au/it-pro/government-it/smart-meter-data-shared-far-and-wide-20120922-26dvp.html#ixzz27MHgbKKq

High power bill trap for the unwary

admin — Mon, 24 Sep 2012 01:40:51 +0000

Confusion reigns as a wave of competitors clamour to lock in households and businesses on electricity deals.

It is the biggest marketing tussle since surging growth in mobile telecoms and internet demand spawned the battle between Telstra and the bunch of wannabe telcos a decade ago.

Now there is a surge in competition to lock in households and businesses on electricity deals.
‘Switching doesn’t necessarily have positive outcomes’ says Matt Levey at Choice.

Names such as Momentum Energy, Pacific Hydro and NZ’s Meridian Energy are all seeking to garner a slice of the action, taking on the big buys – Origin Energy, EnergyAustralia and AGL.
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Yet are consumers better off? Overseas research indicates households often enter bad electricity contracts and could be better off deciding on their supplier randomly.

”The UK has mandated comparisons, and it is forcing suppliers to advise customers of the best offer appropriate,” says David Stanford of the Consumer Utilities Advocacy Centre.

He says consumers are increasingly confused over the offers in the market place, which is evidenced by surging complaints to the Energy and Water Ombudsman in both Victoria and NSW following deregulation, with recent steep price rises adding to the level of confusion.

That concern was underpinned by a recent warning from the pricing regulator, the Independent Pricing and Regulatory Tribunal (IPART) over retailers raising prices on locked-in customers, as a record number of households are changing their electricity supplier.

At the end of July ”switching” supplier reached an annualised rate of one in five of all households in NSW, pushing it towards 60,000 that month alone which is close to the levels routinely seen in Victoria, which boasts one of the most competitive electricity markets in the world.

And their suspicions that some retailers may be acting in an underhanded way were confirmed when the NSW government this week decided to ban termination fees if their electricity retailers change the terms of their contract, such as raising tariffs even though the household thought it had entered into a contract running for a couple of years which would ”lock in” their tariffs.

Read more: http://www.canberratimes.com.au/business/high-power-bill-trap-for-the-unwary-20120921-26bvx.html#ixzz27LVzTDRG

Power shock: bills up 33% in five years

admin — Fri, 21 Sep 2012 03:24:15 +0000

Victorian electricity prices have risen by 10 to 12 per cent in the past year, a new study has found.

The study by the Essential Services Commission also found electricity prices increased by an average 33 per cent over the past five years; and gas by 22 per cent over the same period.

Electricity prices for consumers on standing offers increased by an average of 10 per cent, while prices for consumers on market offers increased by an average of 12 per cent.

Standing offer contracts are held by customers who have not taken up competitively priced market offers. Around one-third of Victorians remain on a standing offer for their retail electricity or gas.
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However, the report also highlights the increasing competitiveness of the energy retail market as consumers shop around to save on their soaring energy bills and door-to-door sales activity increases.

More than 1 million, or 26.7 per cent, of all gas and electricity customers switched retailers last year — including more than 680,000 electricity customers and 430,000 gas customers.

The annual transfer rate was slightly lower — 1.8 per cent — than the number of customers who switched retailers in 2010-11.

The report found residential electricity customers who shopped for a competitive offer could save an average 12 per cent, or $114, on their electricity bill by switching from a standing offer to a fully discounted market offer for a single rate tariff.

Residential gas customers could save an average of 9 per cent, or $114, on their annual bill if they switched from a standing offer to a fully discounted market offer.

Pacific Hydro skips middle man

admin — Thu, 20 Sep 2012 05:07:21 +0000

RENEWABLE energy player Pacific Hydro is launching its electricity retailing business this week as it tries to cut its reliance on “middle men” to progress hundreds of millions of dollars of proposed wind farms.

The company’s new retail licence will allow it to offer electricity directly to business customers in Victoria and South Australia, rather than rely on inking long-term power sales contracts with large retailers such as Origin Energy and AGL Energy, The Australian Financial Review reports.

Regulator wants energy target dumped

admin — Wed, 19 Sep 2012 23:39:51 +0000

The NSW pricing regulator IPART has called on Canberra to abandon its renewable energy target now that a price has been put on carbon.

It has also thrown its weight behind the need to reduce electricity reliability standards to stem spiralling power prices.

The Independent Pricing and Regulatory Tribunal also backed the roll-out of so-called smart meters, although not for their introduction to be mandated as in Victoria, where the cost of the introduction has risen fourfold to $2.3 billion.

In a submission to a federal government inquiry into power prices, IPART highlighted the role of high reliability standards in forcing prices higher in NSW. This should be reduced by adopting the methodology used in Victoria, it said.
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The main reason for rising prices in NSW has been a doubling in real terms in transmission costs, which now make up $1159 of a typical household’s annual electricity bill.

However, the combined cost of the carbon price, the renewable energy scheme, the climate change fund and the energy savings scheme adds a further $316 to the bill.

Of this, the carbon price accounts for about 9 per cent, or $167, of a bill, with the other “green” schemes adding a further $149 a year.

Energy firms say consumers need incentives to use less power on hot days

admin — Tue, 18 Sep 2012 06:22:41 +0000

Energy giants say households would have cheaper power bills if they were incentivised to use less electricity on hot summer days.

In a defence against accusations of “gold-plating” by the Prime Minister, the Energy Networks Association has told a Senate inquiry that upgrades to poles and wires have been necessary to meet government standards and to replace ageing infrastructure.

The ENA says governments should encourage households and businesses to use less power at peak times rather than conducting a “search for scapegoats” on rising power bills.

“If governments wish to curb the rise in electricity prices, they will eventually have to confront these issues,” the submission says.

The peak body for network businesses, which operate the poles, wires and pipes that transmit and distribute electricity and gas in Australia, says investment has been needed to cater for “peak demand” – which is when lots of people use lots of power on very hot days.