Renewable Energy Not Responsible For Major Price Hikes

power lines and sunlight
Maintaining infrastructure contributes more to the increasing cost of power than instituting renewable energy systems.
(cc) Damien Dempsey

Instituting renewable energy systems costs money. But is this cost responsible for price hikes in consumer electricity bills? Not according to Australia’s Clean Energy Council. The CEC found that the contribution of renewable energy to rising power bills is tiny compared to the huge investment required to meet peak demand and replace aging infrastructure including poles and wires.

Clean Energy Council acting Chief Executive Kane Thornton said that more than $20 billion in investment and thousands of jobs would be unlocked by Australia’s pledge to generate 20 percent of its electricity in 2020 from renewable energy sources such as solar, wind, hydro, bioenergy, wave, and geothermal ‘hot rocks.’

“Renewable energy is supported by the vast majority of Australians and the national 20 percent Renewable Energy Target is designed to come at a minimal cost,” he said. “According to the Australian Electricity Market Commission, more than 90 per cent of the price rises over the next three years will come from increases in costs for the traditional energy system.”

Mr Thornton said Australia was staring down the barrel of a 37 percent hike in national power prices over the next three years, but passing the buck would not help solve the problem.

“It is widely acknowledged that this rise is due to the cost of replacing old poles and wires, as well as building new capacity to meet additional electricity demand for appliances such as air conditioners and televisions.

“Every average sized air conditioner costs electricity users around $7000 in extra costs to the power grid, according to the Federal Government’s draft Energy White Paper. The paper also states that peak demand represents around a quarter of total network costs.”

Mr Thornton’s comments came after the Energy Users Association of Australia released a report indicting Australia’s power prices are high compared to many other countries. It was followed by a call from the Australian Chamber of Commerce and Industry to abandon renewable energy schemes.

“Organisations like the Australian Chamber of Commerce and Industry risk their credibility by trying to pin rising power bills on renewable energy, while apparently ignoring the main factors that have led to recent price hikes,” he said.

“Renewable energy produces about 10 percent of Australia’s electricity. The idea that 10 percent of our electricity somehow makes the other 90 percent unaffordable is absurd.”

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