Experts Issue Power Price Warning

The lack of a carbon price is paralysing investment in Australia’s energy sector and putting domestic power bills on track to surge by up to 40%, experts have warned.

Key points:

  • Experts say without a carbon pricing plan, consumers will see electricity prices increase by up to 30%
  • Government is not in support of an Emission Intensity Scheme and outlines that it won’t solve the problem
  • Experts and businesses say a lack of national energy policy has left Australia in the grip of an energy crisis

It is believed that consumers on the eastern seaboard could see retail electricity prices rise by as much as 30% by June. “It is an unprecedented rise. That’s simply because there’s a shortage of supply in generation and that’s simply because the market can’t respond because of the lack of any carbon price,” energy expert Danny Price said.

Mr. Price is the architect of the Emissions Intensity Scheme (EIS), the one carbon pricing plan that after a decade of argument has emerged with the broadest support.

He said the cost of not putting an EIS in place could eventually see electricity price rises of “around 30 to 40 percent” and he expects that by the end of next month retail electricity prices could rise “in the order of 20 to 30 percent”.

“If an Emissions Intensity Scheme had been put in place customers would have been seeing a price reduction in absolute terms,” he said.

The energy review being conducted by Chief Scientist Alan Finkel will likely be released in June. The review is likely to conclude that Australia is now paying the price for a lack of decisive government action in climate and energy policy.

Experts and business groups agree Australia is now in the grip of an energy crisis and that the lack of a coherent climate and energy policy has hurt Australian consumers and business badly. Australia’s electricity system is also seeing huge stress due to the changing generation mix as more renewables are brought online and old coal-fired power stations close.

Electricity prices have also been affected by upgrades to poles and wires and a reliance on more expensive gas. This is causing uncertainty right across the electricity network but particularly for consumers on the brittle fringes of the grid.

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