Tassie families lose in energy policy gamble

THE announcement of a 12 per cent increase in electricity prices will be unwelcome news for Tasmanian families struggling with the rising cost of living.

As supermarket prices, petrol prices and the cost of housing stretch the household budget, a big increase in energy costs comes as another blow.

For Tasmanians on fixed incomes or social security benefits, there is some consolation in the form of the government’s relief package announced on Friday, but working families can expect to bear the full brunt of about $220 a year more to keep the lights on.

Friday’s announcement is the direct result of a series of policy decisions – some would say failures – by state and federal governments.

The federal Coalition for most of the past decade floundered around trying to find a solution to the obvious need for an orderly transition away from fossil fuels without displeasing climate sceptics within its own ranks.

Scott Morrison and Angus Taylor’s solution of a gas-led recovery was criticised as a bad idea at the time, now even more so given the instability in world markets.

And the failure of federal governments to secure a price-stabilised domestic gas supply sufficient to meet local needs is an equally stunning oversight. National policy has been distorted in favour of multinational gas producers at the expense of Australian power consumers.

At a state level, Tasmania rolled the dice by re-entering the National Electricity Market. The Liberals delinked the state from 2017-18 to 2019-20 but abandoned the policy without telling anyone.

Delinking cushioned a state with ample renewable energy generation capacity from interstate price shocks.

But the temptation of the revenue and jobs from exporting green energy to mainland markets proved too much. The so-far hypothetical benefit behind the proposed but unfunded Marinus Link interconnector and its potential to deliver the surplus generated by wind farms and pumped Hydro projects apparently offset the very real risk.

In recent weeks the soaring gas price has caused unprecedented instability in the NEM. After a price cap was introduced, some generators withdrew, causing supply issues. Trading on the spot market had been suspended.

The resulting mess makes it look like Tasmanian power consumers are the losers in a bet made by the state government on behalf of wind generators and Marinus Link boosters.

The price of producing electricity in Tasmania has not increased by 12 per cent. There is no shortage in generating capacity.

It would be unfair to expect Minister for Energy and Renewables Guy Barnett to have anticipated exactly this turn of events — but that’s what Tasmania signed up for when it joined the national market. Buy the ticket, take the ride.

The resulting mess makes it look like Tasmanian power consumers are the losers