Turnbull plan would cut 6 per cent off power bills in best scenario

Federal Labor leader Bill Shorten (right) is seen with site manager Glen Poynter during a visit to the Incitec Pivot industrial chemicals plant in Brisbane, Tuesday, October 10, 2017. Mr Shorten was in Brisbane to discuss the national energy crisis. (AAP Image/Dave Hunt) NO ARCHIVINGEven the best energy policy will do little to reduce costs for consumers, experts have warned, as the Turnbull government resists pressure to substantiate claims its new policy will save ns $2 a week on power bills.
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In Parliament on Wednesday, Labor seized on suggestions the reduction could be closer to 50?? a week but Energy Minister Josh Frydenberg stood by the claim of an average $115-a-year saving between 2020 and 2030.

“The national energy guarantee is a credible, workable, pro-market policy that will deliver lower power prices for ns and involves no taxes, no subsidies and no emission trading schemes,” he said.

A report this week from the n Competition and Consumer Commission found a 63 per cent power price rise since 2007 had put consumers under “unacceptable pressure”.

Based on these figures, the Energy Security Board’s unreleased modelling on the $115 saving would cut 6 per cent off the average annual bill of $1691 by 2030.

Labor leader Bill Shorten urged the government to release the full report.

“They haven’t done their homework, they can’t back up their numbers and they’re only offering ns, in the best-case scenario, somewhere between 50?? and a little bit more each week in three years’ time,” he said.

But the director of Deakin University’s Centre for Energy, Samantha Hepburn, said even the most thorough review of policy settings would struggle to make a dent in prices for consumers.

“Transitioning to a lower emission intensive framework generates cost uncertainties,” Professor Hepburn said. “This is exacerbated by the gas position – gas affordability on the east coast is largely an issue of supply.”

She said that once the federal renewable energy target (RET) ends in 2020 the national energy guarantee (NEG) would allow retailers to choose the least expensive mix of generation to meet their emission obligations.

“It may not achieve the same levels or emission reduction or affordability [compared to the renewable energy target],” she said.

Energy Consumers welcomed the announcement but said thorough consultation was still needed.

The policy will rely on the market to encourage renewable energy uptake through technological advances and falling costs, while $66 billion in renewable subsidies to the sector will be scraped.

At the same time, the government will mandate a minimum amount of base-load energy be generated through sources such as coal and gas in an effort to keep prices down while preventing blackouts.

“It is time to move beyond acronyms and get on with the job because households and small businesses want these issues settled,” Energy Consumers chief executive Rosemary Sinclair said.

“There is no silver bullet here, there are instead several policy levers which will need to work together to provide more affordable and reliable power for consumers, while lowering emissions at least cost.”

The MGA Independent Retailers Association said the plan offered some hope to many retailers who had been looking down the barrel of closing their businesses.

“They simply cannot continue facing out-of-control energy bills and survive into the future,” he said.

“It may not be ideal and there may be alternatives. But at this point in time it is the only feasible solution we have been offered. We urge state governments and others that are bickering over the finer details of the plan to desist from arguing from an ideological perspective and to accept this is a plan that we can utilise to move forward.”

The country’s largest energy producer, AGL, will front a public hearing on Thursday and is expected to focus on the role of battery storage and solar in private homes in reducing costs “behind the meter,” according to a submission from its chief economist Tim Nelson.

It has begun briefing shareholders on its plans for life after its coal fired plant Liddell, which it had planned on shutting in 2022, but it is understood that plan is now under review to ensure it is consistent with the Energy Security Board’s recommendations.

The energy company has flagged batteries at Liddell power plant, an upgrade to Bayswater and a new gas operation in Newcastle on the mid-north coast of NSW as potential options to keep baseload power running in the event of a Liddell closure.