Networks Throw Our Good Money After Bad

Friday, 09 January 2004 10:00

We are well on the way to becoming one of the most greenhouse polluting States in the world. Today's IPART report says we need more committees and policies to achieve energy efficiency. We have to stop talking and take action in 2004.

"Consumers are being forced to throw good money after bad with price rises that ignore the savings potentials of demand management," said Jeff Angel, TEC Director. "Electricity demand in NSW has reached crisis proportions. If nothing is done to reign in network expansion, the State is set to be one of the most greenhouse polluting in the world."

"IPART is happy to sign off on $8 billion of capital expenditure but has baulked at real action on demand management. It is critical that IPART disallows inefficient investment that ignores demand management. Spending by networks of around 1% on demand management is clearly inefficient when there is potential for 35% savings."

Demand management investments have a proven benefit to cost ratio of over 10:1. The Federal Government's recently released paper 'Towards a National Framework for Energy Efficiency' has confirmed that there is the potential for 35-70% savings in the residential sector. The report shows that energy efficiency could save $1.8 billion GDP.

"Investment in energy efficiency is languishing in a cesspit of industry inertia," said Mr Angel. "IPART has recognised the problems for over a decade but we're still waiting for a coherent response. The decision to remove the overall cap on network revenue has resulted in a clear incentive for the networks to sell more electricity."

"It is now urgent to fast-track the independent Demand Management Fund recently announced by the Premier. The pressure is on Minister Sartor to deliver the efficiencies that the networks are ignoring."

Despite 18 months of deliberations, IPART failed to finalise the mechanisms to encourage demand management in its review. Instead, the regulator has promised to set up working groups to further investigate demand management.

Electricity makes up almost 50% of greenhouse emissions which are causing global warming. On Wednesday, scientists warned that even a moderate increase in temperature could wipe out 40% of the world's species.
 

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