Sparks Fly Over Electricity Industry Shake-Up

ELEC

The Federal and Queensland State Governments have announced major changes to the energy industry this month, prompting  questions of price spikes and job cuts in regional areas.

By Rachel Lang

The Federal Government’s Energy White Paper released earlier this month, signaled the abolition of key clean energy services sending shockwaves through the environmental community.

The 72-page report outlines the Federal Government’s vision for the energy industry and has little focus on renewable energy sources, concentrating primarily on coal and gas industries.

The Paper also confirms the coalition’s push to sell off government owned energy assets to allow competitive pricing for consumers.

Despite the Federal push for privatisation, the Queensland State Government announced this week that they will not open the electricity market to competition for another year in some parts of the state, due to a pending public enquiry on electricity costs.

CREDIT:Sunlight Systems Australia

LIGHTS OUT: Coalition to scrap solar schemes. CREDIT:Sunlight Systems Australia

Federal Government Slashes Clean Energy Scheme

The coal focused Energy White Paper has revealed the Coalition will scrap the Clean Energy Finance Corporation (CEFC), a financier providing investment assistance for renewable energy projects.

Despite the abolition of the CEFC, the White Paper tracks a 12 per cent increase in renewable energy consumption in the 2012/13 financial year.

“If [solar battery] costs continue to reduce, some consumers with their own generators may choose to disconnect from the network to avoid network fees altogether,” the Paper reports.

Greens Senator Christine Milne says the jump in renewable energy sources could pose a risk to the traditional structure of electricity sales, affecting the profits of power retailers.

“The issue for the government is that renewables are threatening the business model of the ‘big three’ [national] electricity retailers – Origin, Energy Australia and AGL,” Senator Milne says.

“They control 72% of the market and use their market power to protect their own electricity generation assets.”

The Paper has been slammed in environmental circles for its lack of focus on clean energy.

CEO of environmental advocacy group, The Climate Institute John Connor says that the government should not sidestep the opportunity that renewables bring to the energy sector.

“This Energy White Paper envisages an Australia clinging on to its old, dumb and dirty energy sector rather than driving a switch to modern, smart and clean energy,” Mr Connor says in a statement published in The Climate Institute website.

“The Paper notes that we have a large proportion of aging, inefficient and high emissions power stations, but offers no plan to clean them up, instead relying on a market that doesn’t even account for costs of carbon pollution.

“The vision and recommendations of this White Paper remain mostly a fantasy of climate ignorance.”

CREDIT: Courier Mail

COME TOGETHER: Premier Annastacia Palaszczuk with Deputy Premier Jackie Trad and Employment Minister Curtis Pitt. CREDIT: Courier Mail

Industry Changes Could See Job Losses in Regional Queensland

The Energy White Paper is pushing to increase competition through the privatisation of the energy network – through the sale of state-owned assets.

The Paper also introduces a $5 billion dollar booster package, the Asset Recycling Initiative. The initiative involves incentive payments up to 15% of sale price of assets to encourage states to sell, and use the money to invest in new state infrastructure.

Instead of selling Queensland’s assets, the Palaszczuk Government intends to merge the three electrical networks, Ergon, Energex, and Powerlink, into one super network.

Both Powerlink and Energex are based in Brisbane, with Ergon Energy located in North Queensland.

The merger could see Ergon Energy’s head office, currently situated on Townsville’s Flinders Street, relocated elsewhere.

Federal member for Herbert, Ewen Jones, says that the White Paper is focused on the wider energy industry.

“I see the Energy White Paper as not so much about whether the state is going to close down an office, but [sic] I see it as the future of our industry.” Mr Jones says.

“Especially up here where we have a great port; we are bringing in ore from overseas to be refined at Queensland Nickel.

“We can build on that [port] if we are competitive when it comes to price.”

Two power generation companies are also to be merged which will result in the Queensland Government dominating 66% of Queensland’s electrical network, a move that troubles the Australian Competition and Consumer Commission.

Ergon Energy declined to comment on the potential merger. State Treasurer and Minister for Employment, Curtis Pitt, was also unavailable for comment.

 

CREDIT: EcoNews

CANNED: Deregulation of the energy market in state’s south east has been scrapped for another 12 months. CREDIT: EcoNews

State Government Dumps Power Price Deregulation

Meanwhile, the State Government has delayed the planned deregulation of electricity prices in the State’s southeast for another year to allow time for a price review.

The recently ousted LNP State Government had targeted deregulation of the electricity market to come into effect in two months, allowing the market to set the price of electricity.

Instead, the soon to be established Queensland Productivity Commission will look into effective electricity pricing.

Energy Minister Mark Bailey says that the Commission will look at a range of factors to protect the interests of consumers.

“The review will also take into account the need for a competitive electricity market, efficient investment in infrastructure, and good environmental outcomes,” Mr Bailey says.

“This way, input can be sought from the community, businesses, industry and key stakeholders so that the final deregulation model is in everyone’s best interests.”

He says the review will ensure stronger consumer protection measures and that under the National Energy Customer Framework, greater protection for energy customers in financial hardship will be in place.

Deputy Opposition Leader John-Paul Langbroek says that the postponed deregulation has cost Queenslanders cheaper electricity bills.

“By abandoning power price deregulation, Labor has abandoned the Queenslanders that are crying out for cost of living relief,” Mr Langbroek says.

He says Labor’s decision to defer his party’s landmark policy in favour of  undertaking another review will prevent energy retailers from expanding in the market.

“The decision to defer the LNP Government’s plan to deregulate retail electricity prices is nothing more than an excuse to avoid any decision making.

“If the Palaszczuk Government continues to stall on making decisions they will stall Queensland’s economy, pure and simple.”

Queensland is the only state not to move to de-regulated electricity pricing.