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But Finkel re­port pro­vides blue­print for bet­ter fu­ture

Money Magazine Australia - - CONTENTS - Michael Mo­ran, man­ag­ing di­rec­tor, Voltio

For the past decade, Aus­tralian elec­tric­ity con­sumers have en­dured con­tin­u­ous price in­creases, and this year hasn’t been any dif­fer­ent with rises be­tween 7% and 20%, de­pend­ing on which state you’re in, re­sult­ing in ob­vi­ous neg­a­tive im­pacts on fam­ily bud­gets and busi­ness com­pet­i­tive­ness.

These July en­ergy price hikes have come off the back of the clo­sure of the Hazelwood power sta­tion in Vic­to­ria in March, com­bined with a tripling of whole­sale gas prices over the past three years. A per­fect storm re­ally, which has re­sulted in baseload whole­sale elec­tric­ity prices in ef­fect dou­bling in NSW, Vic­to­ria and Queens­land since this time last year – a cri­sis that could have been avoided with bet­ter plan­ning and gover­nance.

For in­stance, estab­lish­ing a do­mes­tic gas re­serve, which would have acted to in­su­late the price we pay for our gas from the price at the LNG ex­port ter­mi­nals (as in Western Aus­tralia), could have sig­nif­i­cantly re­duced the cost cur­rently re­quired to power our homes and busi­nesses. There is un­der­stand­able frus­tra­tion: a re­source-rich na­tion such as Aus­tralia can and must do bet­ter. And, fi­nally, some­one has re­mem­bered the cus­tomer!

Voltio welcomes the Finkel re­port as the ba­sis for a sci­ence-based, non-par­ti­san path to guide Aus­tralia’s en­ergy fu­ture – a scheme that truly be­gins to pri­ori­tise “re­ward­ing con­sumers”. Es­ti­mates sug­gest that the scheme would save the av­er­age house­hold $90 a year. The scheme calls for an ab­so­lute tar­get for car­bon emis­sions of 700kg of car­bon diox­ide (CO2) per MWh (megawatt-hour) of elec­tric­ity gen­er­ated, which is an achiev­able goal that is mean­ing­ful in terms of Aus­tralia’s in­ter­na­tional cli­mate change com­mit­ments.

Cur­rently, Aus­tralia ranks poorly com­pared with other na­tions, with elec­tric­ity gen­er­a­tion pro­duc­ing, on av­er­age, about twice the CO2 tar­get level. In com­par­i­son, so­lar power pro­duces zero CO2 emis­sions and is now con­sid­er­ably cheaper than re­tail en­ergy prices for most homes and busi­nesses.

For too long, rea­soned de­bate and sen­si­ble pol­icy for­mu­la­tion have been ham­pered – not only in Aus­tralia – by the size and com­plex­ity of the is­sues and se­lec­tive use of statis­tics by vested in­ter­ests on both sides. The Finkel re­port of­fers a blue­print to take the first steps to a bet­ter en­ergy fu­ture.

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