Federal and state government renewable energy schemes have been slammed by the NSW pricing body, which says the cost to consumers greatly outweighs the benefits.
The Independent Pricing and Regulatory Tribunal (IPART) announced on Thursday that NSW power bills are set to rise by up to 18.1 per cent from July.
Six per cent is being blamed on the federal government’s Renewable Energy Target (RET), with a further 10 per cent on a threefold increase in network costs.
IPART says the actual costs of generating electricity have risen only one per cent while the cost of green energy schemes has risen sharply.
Speaking in general terms about renewable energy programs, including the RET and the nation’s various solar energy feed-in tariffs, IPART chairman Rod Sims said: “The renewable energy target was of course very widely welcomed from all sides when it was introduced.
“I just think the way that the subsidies were put in place at both the commonwealth level and again at state level were such that the costs imposed were much greater than the benefits.
“I think what we would say is, relook at those schemes to try and align the costs and benefits.”
The RET is designed to ensure 20 per cent of Australia’s electricity comes from renewable energy sources by 2020.
Significantly, Mr Sims said a single price on carbon emissions would be cheaper than the nation’s various stand-alone renewable energy schemes.
“I think it’s fair to say that a price on carbon is much lower cost than these particular interventions that revolve around renewable energy,” he said.
Speaking specifically about NSW’s Solar Bonus Scheme, Mr Sims said it should be closed off to new participants and reviewed.
The scheme pays householders for all energy generated by residential solar panels, including what they use themselves as well as what they feed into the grid.
IPART chief executive officer Jim Cox said he was “very concerned” about the increase in NSW power bills.
Mr Sims said the rises would particularly affect lower income households and those who used a lot of electricity.
Under the IPART recommendations released on Thursday, NSW household energy bills will increase by between 16.4 per cent and 18.1 per cent.
Bills from Ausgrid (formerly EnergyAustralia) are set to rise 17.9 per cent, Integral Energy bills by 16.4 per cent and Country Energy bills by 18.1 per cent under the proposals.
IPART says average residential customers will pay between $228 and $316 extra a year.
Average business customers will pay between $325 and $528 more a year.
The rises will come into effect from July 1 this year.
Business chamber anger
The NSW Business Chamber has reacted angrily to the rises.
“The days of cheap energy are over,” Stephen Cartwright, chief executive of the NSW Business Chamber, said in a statement.
“This is a crippling blow for every energy-reliant business in NSW and a savage blow to local exporters who have yet to come to terms with the impacts of a very high Australian dollar.”
He said the impact of the federal government’s planned carbon tax would send bills even higher in future.