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Queensland’s renewable energy targets to push up power prices, say energy suppliers

Queensland families will face higher power bills to enable the State Government to meet its renewable energy targets, analysis warns.

The Palaszczuk Government aims to source 50 per cent of electricity from renewables such as solar and wind by 2030.

But the Energy Suppliers Association of Australia said that could be more than $1 billion a year more expensive than traditional generation such as coal or gas – and consumers will bear the burden.

The switch will make the average household bill $60 a year more expensive than it would otherwise be, according to the ESAA.

Energy Minister Mark Bailey dismissed the projected price hike as “speculative’’.

The industry body says about 6 per cent of energy needs could be met from rooftop PV solar panels and similar devices, leaving 44 per cent to come from “utility scale’’ renewables such as wind farms and solar farms.

“To be viable the renewable projects are likely to require a wholesale price between $80/MWh-$140/MWh, depending on the project. The regulated retail price currently has a wholesale allowance for 2015-16 of $63.73,’’ the ESAA said.

“The difference between these two figures, which could grow to more than $1 billion per year, will need to be covered by another source of revenue. If this is added into retail prices it would push up retail bills by around $60 per household.’’

An ESAA spokesman said the extra cost was based on an average household usage of 4/MWh per year.

It comes on top of the cost of the state’s Solar Bonus Scheme. The Australian Energy Regulator has approved a 25 per cent increase in the amount of revenue Energex can reap over the next four years – from $6.5 billion to $8.1 billion – to offset that cost.

“Almost one in four Queensland households currently has solar, meaning they already avoid part if not all of these policy costs that are loaded into consumption charges,’’ the EASS said.

Mr Bailey said: “There are also other publications stating the cost would be around $6 per bill in 2030.

“There are many speculative studies about different energy scenarios. Many assume that the price of energy – whether it’s coal or renewables – stays the same. They then make large cost predictions.

“But the fact is, renewable energy is becoming more affordable and demand for electricity is falling. The cost of solar power is, for example, much cheaper than it was four years ago.

“I’d prefer to take a methodical rather than speculative approach to working out the most effective way of transitioning to clean energy.’’