Today I received exciting news that my electricity bill will go down, and with my 'normal punter' hat on, that feels like a relief after years of massive increases.
In fairness, the regulators have performed a miracle to take the pressure off, given that solar, the carbon tax and the Renewable Energy Target were apparently going to cause endlessly increasing electricity price rises and damn us all to eternity, according to those who want those schemes axed. But no, not in NSW...
So what gives?
Well, interestingly, in April the NSW Government announced a decision to remove the regulation of retail electricity prices from July 1. In their submission to the RET Review they noted that: “NSW price deregulation may also lead to additional savings from the RET for customers who were on standard contracts, if retailers’ actual costs in meeting their RET obligations are lower than would have been allowed for in (regulator) IPART’s pricing determination and there is sufficient competition to ensure cost savings are passed through.”
The outcome suggests that what they predicted has come to light – and, lo and behold, my bill has reduced thanks to the RET.
Without doubt, retailers have had it pretty sweet in NSW.
They have been allowed to pass on the full $40 price of renewable energy certificates to consumers, while buying them at substantially lower prices on the trading market. For years.
They have also been allowed to capture the value of exported solar energy and realise windfall profits by on-selling it to your neighbours. No one really knows how much this is worth because retailers aren’t required to report who signs up to (voluntary) solar export tariffs and the Queensland Government liked this idea so much they have just done the same thing.
Anecdotal evidence and some quick calculations from installation data of customers on net billing would suggest it's in the order of $5 million to $10 million per annum.
Now, undoubtedly, there are a whole lot of politics behind this change of electricity price in Australia’s most populous state. But one thing is clear – as modelling tells us over and over and over again – the RET helps to reduce wholesale electricity costs and when the market is forced to pass on those savings in a timely manner (which it previously wasn’t), consumers save money. Because of solar.
And yet at the same time as my electricity bills are going down, 25 Coalition MPs – comprising about half the government backbench in the lower house – have written to Environment Minister Greg Hunt and Industry Minister Ian Macfarlane calling for the RET to be dramatically scaled back. Staggeringly, they have used the excuse that aluminium smelters should be exempt from RET cost imposts (even though they already get exemptions), so they continue to use any old dirty energy they want with utter impunity “because they are very important, we need them for the stability of the grid”.
Here we have politicians arguing, threatening us that the very stability of electricity supply in Australia is at risk if we don’t cut the RET?
Give me a break!
Our networks can cope with all sorts of stuff; we saw 65 per cent of South Australia's demand supplied by wind power last week, we see huge spikes in demand with weather events, and these numb nuts are going to try and suggest that a staged writedown of demand by aluminium producers can’t be managed? And what about the prospect of them actually buying renewable energy, especially those in Tasmania who have access to the best wind resources in the world or the voluminous hydro energy available?
Narrow-minded, short-sighted, alarmist, non-factual bull. Sorry, but in NSW we have clear evidence that electricity prices are falling because of the RET and a massive opportunity to leverage reduced emissions, increased renewable energy, a new energy future and cleaner aluminium – and yet the best that 25 MPs, our government, can come up with is 'let them pollute, with impunity, with no incentive to clean up their act or do anything different'.
I wish I was surprised but I’m not. We are governed by Luddites.
Nigel Morris is the director of Solar Business Services.