The price of power in Australia continues to increase, baffling many residents who thought that the country’s support to new and renewable sources of energy would translate to lower electricity bills.
Recently, the Energy Users Association of Australia said that the price of power in South Australia would be the most expensive in the world. In 2011, the said group noted that the price of power in that part of Australia was third highest behind Denmark and Germany.
In the said report, the group noted that South Australia’s price of power had an average of 28.6c for every kilowatt hour. This trailed Denmark’s 31.4c and Germany’s 28.7c.
However, the group anticipates that the prices in South Australia would become the highest in the world by July this year.
According to Prime Minister Tony Abbott, the price of power in Australia is increasing due to two things—the now repealed carbon tax and the country’s renewable energy target (RET).
The carbon tax, introduced in 2012, required polluters to pay for every tonne of carbon that they release into the environment.
On July 17, Australia became the first country in the world to remove its carbon pricing after the Senate passed a carbon tax repeal bill. The move was seen as a victory for Abbott who had made the repeal a major platform of his administration.
Abbott also blames the renewable energy target of the country for increasing Australian electricity prices. He added that he does not want the country to lose good industries employing thousands of people and which add value to the economy, pertaining to coal-fired power plants.
The Australian Energy Markets Commission says the RET has added around four per cent to the price of power of an average household, which translates to about a dollar for every week.
But the Federal Treasury also notes that more than half (51%) of the average price of power goes to network expenses. These network expenses amounted to $45 million, and include the updating of poles, wires and infrastructure made by power companies over the past five years.
In 2012, the Senate conducted an inquiry on the rising costs of electricity. Labor MP Matt Thistlethwaite, who chaired the investigation, said that they found out that there were many unnecessary infrastructure projects that were still built during the said period.
Energy analyst Bruce Mountain admitted that there is a substantial amount of money wasted on these infrastructure projects. He said that at least half of the money spent was not actually necessary.
Solar Power to reduce Price of Power
With the rising Australian electricity prices, many Australians are now turning to solar power. It has helped that the costs of solar power panels have significantly been reduced over the past few years, with the availability of cheaper materials coming from China. A 3-kW solar panel system can be bought for as low as $3,000.
To date, an estimated 1.3 million Australian households are now getting daytime energy from their solar panels. And with energy prices sky-rocketing, solar power will be a boon for most Australians.