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Power prices set to rise 30% report predicts

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A REPORT has predicted that household electricity bills will rise by up to 30 per cent by mid-2013, with the federal government's renewable energy scheme responsible for 11 per cent of that increase.

The report by the government's chief energy adviser says the costs of the Renewable Energy Target - which provides generous subsidies for rooftop solar schemes and large-scale projects such as wind farms - will explode by 360 per cent over the three years to June 30, 2013, as power companies try to meet the target of sourcing 20 per cent of their energy from renewable sources by 2020.

On household prices, the biggest impost will be to fund more than $33 billion in capital works on ageing distribution networks that deliver power, with most of the spending required in NSW and Queensland, The Saturday Australian newspaper says.

The report by the Australian Energy Market Commission was released after a meeting of energy and resources ministers in Perth, who vowed to hold special meetings to ``consider energy security implications arising from the introduction of a carbon price''.

The document will add further weight to this week's warnings by the Productivity Commission that the renewable energy incentives being demanded by the Greens are pushing up costs for little environmental gain.

I like how it's renewables fault even though the rise associated with the cost of renewable energy is 11%. Speaking of which, 11% is pretty specific, what with us being on a base 10 number system I'd have thought that number would be rounded off to 10%. I mean, they did it for the rise up to 30%

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How about a headline "Neglect of energy infrastructure will increase the cost of power by 19% by 2013"

Nah - it's the Murdoch press.

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Substitute house prices and you'd get a national celebration.

I was listening to ABC radio a month or so ago; there was outrage regarding electricity prices projected to double in 7 years.

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Substitute house prices and you'd get a national celebration.

Haha, that comment reminded me of Hired Goon's (GHPC) delightfully satirical artwork.

post-208-089726500 1307859934_thumb.jpgpost-208-038028000 1307859952_thumb.jpg

:laugh:

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They do seem to increase prices and just blame whatever is in the news though :)

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1 hour ago, tor said:

They do seem to increase prices and just blame whatever is in the news though :)

It boils down to deciding on what is the most cost effective and reliable method of generating electricity vs feeling good about yourself whilst having one of the most expensive power costs in the world. I think we should have a referendum on the matter.

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Oh get off your high horse, they raised prices when the carbon dealy was going through and when it was rolled back they didn't rollback the prices. From that I think they realised they can get away with price hikes for anything that is in the news. Remember when people were bitching about infrastructure and they raised prices to invest in new infrastructure, that one never got reduced either (unless they did it after I left).

Your response just shows they can keep doing it really.

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29 minutes ago, tor said:

Oh get off your high horse, they raised prices when the carbon dealy was going through and when it was rolled back they didn't rollback the prices. From that I think they realised they can get away with price hikes for anything that is in the news. Remember when people were bitching about infrastructure and they raised prices to invest in new infrastructure, that one never got reduced either (unless they did it after I left).

Your response just shows they can keep doing it really.

When Abbott stopped the carbon pricing, the energy retail prices initially dropped. The error of federal and state governments is twofold. Firstly, generation and delivery of power should have been organised to ensure competition, rather than monopolistic practices. Secondly, policy regarding generation of power should not discourage usage of the most cost effective sources, which also are the most reliable method of providing base load.

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Not as much as they hiked them.

The rest of your statement is irrelevant to my statement. I even agree with it at that high level.

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1 hour ago, tor said:

The rest of your statement is irrelevant to my statement.

Which part was that- decipher it further please?

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That's a different topic. The first bit You: "they dropped the prices" Me: "Not as much as they hiked them" is what I am talking about.

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2 hours ago, tor said:

That's a different topic. The first bit You: "they dropped the prices" Me: "Not as much as they hiked them" is what I am talking about.

Yes, they are showing monopolistic practices allowed by poor legislation which should instead have encouraged competition like the telco industry.

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Ahhh see and I thought you were blaming renewables back in your original statement, now you agree they will raise prices and blame whatever is in the media like when they did during the infrastructure news cycle.

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3 hours ago, tor said:

Ahhh see and I thought you were blaming renewables back in your original statement, now you agree they will raise prices and blame whatever is in the media like when they did during the infrastructure news cycle.

Renewables are part of the cost pressures end up reflected in higher prices. The monopolistic practices add onto it.

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Oh so you _don't_ think they are bastards raising prices and blaming whatever is in the news?

You really don't like choosing a position do you?

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13 hours ago, tor said:

Oh so you _don't_ think they are bastards raising prices and blaming whatever is in the news?

You really don't like choosing a position do you?

Choosing a position on what? You obviously are incapable of comprehending that I clearly stated that there are two main factors determining prices.

Here, look up monopolistic pricing so that you can understand what I said.

It also looks like some of the states' 'feelgood' energy policies will come under further scrutiny at the energy ministers' meeting:

'Mindless' state government policies to blame for rising power prices: Frydenberg

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Why you're about to pay through the nose for power

This clearly explains the cost of the 'feel good' policies:

Quote

...Rather than reducing energy costs, it instead brought our electricity generation industry closer to crisis point.

It was the final straw for an industry exasperated by more than a decade of political infighting and policy backflips.

As expected, investment in renewable energy plummeted. What wasn't expected was that the power industry began to make good on its plans to mothball its antiquated coal-fired generators.

The result? A supply shortage. For anyone with even a vague understanding of microeconomics that means just one thing; price hikes.

The Hazelwood power station closure in March — which is expected to cause blackouts across the eastern states this summer — may have brought the looming crisis to a head.

What's less understood is that within the next two decades, 68 per cent of our coal-fired generators will be more than half a century old and ready to be retired. There are no plans to replace any of them, at least not with coal.

Critically, he recommended that new renewable energy projects must have an inbuilt back up system.
In addition to the solar or wind farm, new projects must include energy storage through either battery or hydro or some other means of back-up such as gas.

That increases the cost of renewables and ensures coal and fossil fuels will continue to play a role in electricity generation for at least the next decade and probably longer.

In fact, under Finkel's recommendations, coal will continue to supply around 53 per cent of our electricity generation in 2030, only marginally lower than the 57 per cent if we did nothing. Right now, coal accounts for 76 per cent of our electricity generation.

So:

  • The industry had a gutful of chopping & changing policies, expecting that it is pointless investing in the most reliable and cost effective method of generating electricity,
  • The 'feel good', expensive & unreliable energy sources will still require 'old fashion', reliable technologies. So the industry needs to build duel systems, when otherwise a single, reliable system would do. Can anybody guess, whether the extra costs will be recovered via higher electricity prices?!!!

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