Government releases energy white paper
There has been a fair amount of heated discussion about gas and electricity prices. Commentators, industry experts and politicians have been weighing in on the best ways to reduce energy bills, with many falling on either side of the privatisation debate. The federal government has now entered the arena, throwing a few spanners into the works with its new energy white paper.
The report has some interesting insights into the future of the Australian energy industry. Minister for Industry and Science Ian Macfarlane released the document on April 8, which proposes a policy framework for the government to ensure consumers get a competitively priced deal on their energy bills. This followed a green paper from last year, which suggested that privatising energy assets would be the best way to reduce prices.
In essence, the report proposes that bringing all energy assets under the private sector umbrella will make the industry a lot more competitive, thus bringing prices down from their lofty heights. The Australian energy market has already seen prices of gas and electricity skyrocket in recent years. In fact, the research shows that retail gas prices have risen 8 per cent year on year over the past decade - and electricity prices have swelled by an eye-watering 50 per cent between 2010 and 2013.
The Grattan Institute has discovered similar results. In a study from July last year, it found that the average household power bill has grown by a staggering 70 per cent over the five years to 2013 - and this has significantly outstripped inflation. The institute's research concluded that big changes needed to be made to network tariffs and productivity, an issue that - less than a year on - the government's white paper has raised once again.
The energy white paper highlights that improving productivity will help lower costs for businesses and households alike. It has proposed the National Energy Productivity Plan, which will promote more efficient buildings, transport, equipment and appliances, as well as providing more tools and information to consumers.
Minister Mcfarlane said the proposed policies will help households and business across the country make more informed choices about their electricity and gas suppliers.
"The measures in the Energy White Paper will deliver stable energy policy and efficient transparent markets that give consumers information to make choices about their energy use and industry the confidence to invest," he said.
This document marks another major shift in Australia's energy industry, but it remains to be seen how the paper will be translated into action.
Posted by Richard West