Energy regulator approves higher electricity bills not efficiency
Tuesday, 08 December 2009 08:39
After a two year inquiry into how to increase energy efficiency from its current low levels, the Australian Energy Market Commission (AEMC) has recommended doing more of the same.
“It’s a scandal that after two years of talk and bountiful evidence that efficiency is at abysmally low levels, the top regulator says let’s do it again. Their minimalist recommendations mean we will have more of the same: build, generate and pollute with electricity consumers and the environment footing the bill”, said Jane Castle, Senior Campaigner at Total Environment Centre (TEC) on the release of the AEMC’s report, Demand-Side Participation in the National Electricity Market.
The AEMC proposes to continue this review until next March, but TEC is calling on the Federal Government to terminate the process immediately and replace it with an independent inquiry to recommend effective reforms to encourage energy savings in the National Electricity Market (NEM).
“This report is worse than useless as it has distracted us from real action to reduce cost and reduce emissions. The AEMC has shown it is clearly out of its depth when it comes to energy savings. Energy Ministers must step in to fix the national electricity Rules before the current investment cycle lock us into even more expensive greenhouse polluting power stations and power lines,” said Ms Castle.
The AEMC report concluded that, “the NEM framework does not materially bias against the use of DSP. We have found that overall the costs and opportunities to participate provided by the framework are appropriate.”
“The AEMC drew this conclusion without measuring energy savings by electricity companies. Bizarrely, the Review does not even estimate the amount or the cost effectiveness of initiatives to reduce consumption and peak demand.”
“The national energy regulator has recently approved NSW poles and wires to spend the equivalent to $2400 for every person in NSW, but energy savings expenditure of only 70 cents per person over five years. The QLD draft decision is even worse with over $3000 per person being proposed.The AEMC might consider this socially efficient, but consumers and voters receiving ever increasing power bills and carbon costs will disagree.”
“The AEMC is keen on smart grids as a ‘solution’ but it will take many years to roll this out. In the meantime we will be saddled with more polluting infrastructure because the NEM stops energy efficiency. It’s a victory of ideology over commonsense and evidence.”
The AEMC’s Final Report suggests:
• Existing, low levels of energy conservation are ‘socially efficient’
• Market incentives should remain in place (that rewarded utilities for selling more electricity)
• The high connection charges should continue to apply to embedded generation (often renewable)
• Substantial reserve capacity on offer by the demand-side should continue to be shut out (despite the benefits of reduced costs, enhanced security and reliability, and reduced carbon pollution)
