The mandatory renewable energy target (RET) scheme would raise energy prices.
The warning issued by electricity and gas provider Origin Energy comes after the warnings of federal Resources and Energy Minister Martin Ferguson and his opposition counterpart Ian Macfarlane. Both Ferguson and MacFarlane expect power prices to double in the next five to seven years.
According to Origin czar Grant King, “That’s just the inevitable and logical consequences of the (government) policies… It’s not hard to diagnose that the new generation that we need to (meet) the market requirements is going to be more expensive than was previously the case. And therefore that’s also got to be factored into pricing for consumers.”
King was looking at the cost for installing wind farms. The infrastructure costs for the wind farms would results in a price between $100 and $125 per megawatt hour. Coal plants, in contrast, produce electricity that only cost $30 to $40 per megawatt hour.
The enhanced RET scheme was introduced into Parliament on May 12, 2010. After six weeks, The Commonwealth Parliament passed the enhanced scheme.
Under the scheme, 20 percent of Australia’s electricity supply will come from renewable sources by 2020. The amount of electricity coming from sources like solar, wind, and geothermal is targeted to be around the same as all of Australia’s current household electricity use within the time frame.