Report warns of spiralling electricity prices

A new report has warned of surging electricity prices  171 6010372 0 14102451 300

The growth of renewable energy in Australia is nothing to sneeze at. There are almost 1.4 million rooftop solar panels installed across the country as of March, according to Australia's Clean Energy Regulator, and improving technology could mean that even more households and businesses choose these measures in the face of soaring electricity prices

While this is a positive step forward for greenhouse gas emissions, a new report prepared by the Environment and Communications References Committee said the prevalence of at-home solar panels, batteries and wind turbines could leave the remaining proportion of homeowners to pay the bill.

In the interim study, the Committee discussed allegations that electricity suppliers are struggling to maintain the infrastructure, especially during peak periods, which has led to them increasing their network charges. 

"This had led to concern about a death spiral; that is, high prices are causing demand to decline while also encouraging consumers and businesses to engage in their own generation activities," the report said.  

This has been a persistent issue. In a 2013 study, the Grattan Institute institute found that the average household has consumed 7 per cent less power since 2006, while its average power bill has gone up over the same period by more than 85 per cent. At the time, Energy Program Director Tony Wood said that network businesses have spent vast quantities on infrastructure that has become redundant. 

The Environment and Communications References Committee report echoed this point. If consumers continue to choose off-grid systems to generate electricity, network companies would have to maintain an expensive expanse of lines while facing a severe drop in demand for services - and it could be that they are recovering this overspending in consumers' electricity bills. 

The committee suggested that state and federal governments work together with network suppliers to ensure the grid can deal with changes to the energy market, while urging more comprehensive regulation of the market tariff system.

These issues will be compiled and discussed at length in the committee's final report, which is due to be released on May 5. 

Posted by Richard West