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NEG: Turnbull’s electricity cost ruse

NEG: Turnbull’s electricity cost ruse

For Australians struggling with energy bills, at home and in their businesses, will today’s meeting of state and federal ministers to discuss energy policy make any difference?

Electricity is invisible but Malcolm Turnbull’s BS is highly visible as this article weaves crap between the lines of “maybe” “might” and “could” “probably” lower prices. But, as the expert says about the carbon target,”That is locked into the guarantee.” forget about lower price. And typical of anything Turnbull touches is this clanger:

They’re questioning all of the benefits the Federal Government says the National Energy Guarantee will deliver, saying the Energy Security Board (ESB) hasn’t released enough information for the modelling to be verified.

Source: ABC

What does the NEG mean for real cases, real people?

The Turnbull Government says it will reduce carbon emissions by 38 million tonnes, save the average Australian household $550 a year on their power bill, and reduce wholesale prices by 20 per cent.

But Canberra has been struggling to get the agreement it needs from state and territory leaders to finally put a national energy policy in place.

Ahead of the political wrangling, PM wanted to find out some of the things Australians want from a national energy policy, and whether the National Energy Guarantee (NEG) answers those demands.

Businesses call for action from government

Susanna Whitehouse co-owns two inner-city cafes in Brisbane.

Her priorities are reducing her business power bills and increasing Australia’s renewable energy output.

What is the NEG?

Malcolm Turnbull unveils his shiny new energy policy, complete with its own three-letter acronym. Here’s what it all means.

Ms Whitehouse told PM her bills average about $43 a day, and she’s definitely noticed a price rise.

“We have to think about it — do we turn on the air conditioning today?”

She feels it is the Federal Government’s responsibility to reduce the electricity impost on the businesses’ bottom line.

“If they don’t do it, then it is not going to go down,” Ms Whitehouse said.

The Federal Government says the National Energy Guarantee will help reduce Susanna Whitehouse’s costs.

How exactly would the legislation reduce costs?

Energy expert Tony Wood from the Grattan Institute is confident that the NEG will provide certainty to the market, which should help bring prices down from the recent high levels.

He said the NEG “very sensibly” does not assume any particular form of technology to achieve reductions.

“The assessment at the moment is that … consumers will be better off as a result of the guarantee.”

But it does require energy retailers — the people we actually buy our power from — to ensure the electricity they supply is producing less emissions every year between now and 2030.

“That is locked into the guarantee,” Mr Wood said.

“There are clear obligations on the retailers to do that.”

Ms Whitehouse also wants to know about renewable energy, and what it will look like in the future.

“Will households and businesses have to fork out initially for infrastructure, or is that all part of the deal?”

Tony Wood thinks customers can have confidence that there will be a reduction in emissions; the biggest part of that coming from a shift from coal and gas to renewables.

“The cost of connecting those new renewables to the system is included,” he said.

Raising prices or shutting shop – what are the options in remote areas?

For those in remote areas like Northern Queensland, the NEG may not address their concerns about pricing.

Cairns AFL doesn’t fit the mould of the “average” household or business the Federal Government says will save $550 a year.

But Tony Wood believes the NEG is likely to help — eventually — by putting downward pressure on prices.

In the next few years, the state government generator, Ergon, is bringing in a new tariff system, and the AFL in Cairns and other sporting bodies are worried that will send their costs through the roof.

“The basketball people are panicking, the city council who not just run sporting stadiums like us, but swimming pools,” Gary Young, the Managing Director of Cairns AFL, told PM.

Mr Young said his organisation has been told their bills are likely to increase by 50 to 100 per cent.

“I nearly fell off the chair, because our bills range from about $7,000 to $8,000 or $9,000 a month, just to play footy during the winter,” he said.

“That’s when I started having a bit more of a look into these things.”

Will the NEG change the high price of poles-and-wires tariff?

The only energy retailer that AFL Cairns has access to is Ergon, a government-owned corporation.

The NEG is likely have an impact on the mix of energy that Ergon is providing to customers in North Queensland, including more renewables.

“But that’s not something that I think is going to affect the particular concern that Gary’s got,” Tony Wood said.

There are a couple of different charges Gary Young is worried about — above the line, and below the line.

Above the line includes things like putting in solar and LED lights to get consumption down.

But the below the line charge, which is for poles and wires, keeps escalating and absorbing those savings, said Mr Young.

“So, at the end of the day, we’re no better off,” he told Mr Wood.

This too is not something that will be addressed directly by the NEG.

As people in North Queensland find ways to reduce peak demand, that will reduce the size of the network that’s needed, and that will eventually flow through to lower prices, Mr Wood said.

“But it won’t happen quickly,” he warned.

“I don’t think that’s going to happen any time soon.”

“In remote parts of Australia, the cost of the network — the physical wires and poles — is a significant burden and that’s not going to be affected by the NEG in the short term,” admitted Mr Wood.

“The thing that the NEG will affect is the cost of generating the electricity.”

In North Queensland, most electricity is produced by the state government-owned generators, and those costs have come down a little over the last two years and will probably come down some more, says Mr Wood.

He says the NEG will provide more direction for investment for companies that generate power in Queensland (like Stanwell and CS Energy).

Forecasters ‘kidding themselves’

Other energy experts PM spoke to aren’t convinced the plan will work for anyone.

They’re questioning all of the benefits the Federal Government says the National Energy Guarantee will deliver, saying the Energy Security Board (ESB) hasn’t released enough information for the modelling to be verified.

But Mr Wood believes that once the platform is in place, future governments will be able to aspire to decreased levels of emissions.

“There are so many things that are going to move around between now and 2025 or 2030.

“Anyone who thinks they can forecast with any precision and debate the precision and the assumptions of the modelling, is kidding themselves,” Mr Wood said.

But the Federal Government is standing firm on the benefits.

It says it’s a national plan for a national problem, and without it, blackouts and higher prices will be a guaranteed part of Australia’s energy future.

{ 17 comments… add one }
  • TommyGun 10/08/2018, 5:02 am

    Anyone who believes that a politician telling them that power prices will come down has got rocks in their head!
    I vividly recall that goose of a Premier of SA; Dean Brown, telling everyone on TV that, by selling ETSA and getting it privatised, power prices would actually come down!!
    And the suckers bought that crap and have been paying for it ever since.

    (I’m not disputing that ETSA needed to be sold; that was to pay off the massive debt caused by Bank SA’s failure due to the then Labor Govt under John Bannon.)

  • Muphin 10/08/2018, 5:18 am

    While Mr Harbourside Mansion lies through his teeth we are being forced into a $3 billion green rip off. .. https://www.dailytelegraph.com.au/?nk=45881cd5dd2cb9b03a08f9d8e95e5cd6-1533841799

  • Pensioner Pete 10/08/2018, 5:50 am

    A saving of $550 per year, now where did I hear that before, oh, that’s right, when Abbott pledged to rid the nation of the Gillard Carbon Tax. I am still waiting for that one to happen and I reckon it will be a bloody long time waiting for this current spiel to come to fruition. Power prices will never, ever come down until the stupid bastards running this country realize we need to regain 100% public ownership of the electricity industry as an essential service and have coal fired power stations built, and built right now.

    • DT 10/08/2018, 9:08 am

      PP with rising electricity prices I understand why people believe that dumping the carbon tax did not result in saving. But that was a 10% tax on electricity with 10% GST on top, of course its removal was a reduction in pricing.

      The problem was the RET and related subsidies, consumers paying for wind and solar farms to be connected to the grid (so called gold plating excuse) via dedicated power line and more including the auction system when extra electricity is needed for peak periods demand.

      The Abbott led Government tried to have the RET abolished but the Senate would not cooperate.

      • DT 10/08/2018, 9:10 am

        Also, early in 2016 the Turnbull Government with cooperation from the Labor Opposition created a new carbon tax by stealth. It is called the emissions something or other and so far is levied only against coal fired power stations.

        But it is another pricing factor.

  • acolyte 10/08/2018, 7:24 am

    Just watched Chris Pyne on TV spruiking the NEG. Just made me sick with a load of bluster about a subject of which he clearly has no clue, but was happy to spruik the Turnbull line. No plausible facts, just bullshit.

    • Lorraine 10/08/2018, 8:45 am

      the only thing Gillard got right , was her title for Pyne. “poncing poodle”
      Just one look at him makes me sick and Sky has him with the equally dodgy Richard Marles on a program. Juk//// would never watch

  • Ian 10/08/2018, 7:37 am

    Let’s have a look at that NEG.
    * The policy is simple, renewable generation must be expanded from its current low percentage to something higher, (depending on the government of the day, this could soon be 50%).
    * The largest commercial users of electricity from the grid will have to provide the back-up power to keep running when the renewables can’t produce any, eg solar at night or wind turbines when there is no wind. Or, the user has to shed load, (switch off).
    * Power costs for the consumer are meant to drop.
    Now some BASIC facts.
    ** In Australia, as for every country around the world, the more renewables in the grid, the higher the unit cost of production. Plenty of examples of that on JoNova’s site or WUWT.
    ** If the power bills for the consumer are going to drop, then someone has to pick up the current amount plus any extra for the additional renewable percentages added. That would be the large users, since no one else is remaining.
    ** How long will those large users stay in business if they have to not only run their business but now have to secure gas fired generators and pay for them to run at a higher rate than the coal fired power that they currently buy. If it was cheaper to run on gas, they would have built their own generators long ago and switched themselves off the grid. So their costs are going to rise.
    The NEG is going to kill industry and kill it fast. Why would a government want to kill off the main employers and wealth creators in Australia. Especially noting that aluminium exports, (a huge user of electricity), produces export earnings of approximately $300M a MONTH to the benefit of Australia. Without that, we may as well kiss our balance of trade good bye and start using Pesos.

    • Joe Blogs 10/08/2018, 10:46 am

      Si, Senor.

  • Margaret 10/08/2018, 8:25 am

    Turnbull incompetence is the kindest explanation for the NEG… it is evil. It does not guarantee reliable energy. It does not guarantee cheap energy. It is double speak. It means the opposite of what it purports.
    Bronwyn Bishop said it loud and clear on Paul Murray Live last night. People in India and China are burning our coal while Australians are shivering in their beds.

    • crankykoala 10/08/2018, 9:07 am

      Exactly Margaret.
      It is absolutely beyond my comprehension how smart, supposedly intelligent people cannot grasp that to promote renewable energy is a recipe for disaster (as already proven in South Australia – soon Victoria – closely followed by Queensland). As everybody knows, bloody hell it is said often enough, if the sun doesn’t shine and the wind doesn’t blow then output from this source amounts to zilch. Similarly this harebrained scheme of Turdball – Snowy 2.0 – use electricity to generate electricity. This country is held to ransom by all the minorities – greens, lefties, the alphabet brigade, islam and of course the big ones China and the UN. This will continue while we have jelly kneed governments, it is up to the Australian voters (taxpayers) to snap out of their complacency and act at election time.

      • Sandy 10/08/2018, 11:45 am

        All correct cranky but who do we vote for at election time?

      • crankykoala 10/08/2018, 12:22 pm

        Well Sandy, where I live it will probably be Australian Conservatives or One Nation or an Independent. And, I know that will surely get Shitten to the Lodge — unfortunately.

  • DT 10/08/2018, 9:03 am

    How many times must we shout that Carbon Dioxide is not a pollutant, that CO2 is odourless and invisible and essential for life on Earth and only 0.040% of the atmosphere: 400 PPM?

    And how ridiculous it is to be shipping thousands of tonnes of high quality coal overseas to be used to generate electricity in other countries including those where emissions are rising every year by more than Australia’s total annual emissions.

    As for National Poverty Guarantee bringing prices down, how dare the politicians treat us like idiots.

  • Graham Richards 10/08/2018, 9:50 am

    Unless we get shot of this ships of fools, ALP included, you can rely on energy costs increasing by 20% in the next 2/3 years. A carbon tax in one form or another is also earmarked for petrol & diesel fuel. I believe it’s already in place but the tax currently is minimal. It will also increase substantially over the next 2/3 years. It’s all part & parcel of the new Paris Accrd religion.

    • DT 10/08/2018, 10:04 am

      It is the new stealth carbon tax called emissions abatement levy or something like that. Approved in Parliament early in 2016, the tax is levied against coal fired power stations but could be levied on whatever the government chooses to levy.

      The secrecy is worrying and when Freydenberg was asked about a possible new tax on ICEV he denied it would be done but on fuel, what a way to push motorists towards EV.

      And if the government/opposition proceed to push EV, noting that over $300 million is already allocated to promote EV with Macquarie Bank Leasing already in receipt of $100 million for promotion of EV to fleet operators, where would the electricity come from for recharging them? We already have an energy crisis underway.

      • DT 10/08/2018, 11:15 am

        Answer: They don’t intend to allow private ownership of personal transport vehicles in future, EV would be leased by businesses that need them and the rest of us would rent as needed or hire like taxis.

        And our travelling would be restricted, probably by a prohibitively expensive road toll system based on the EV GPS system.

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