With all this talk about a Tax on Carbon & CPRS, it’s easy to assume that carbon pollution element of electricity is all to blame for rising prices… however this isn’t at all the case. While meeting Government Climate Change Targets (which are set low in comparison to many of our developed world counterparts) has a small part to play, the main reason is that we’ve out grown our grid!
Therefore the biggest cause of rising electricity prices is the high capital cost of increased investment in electricity networks – investment that is critical to guarantee supply reliability. No one wants brown-outs!
Australia’s electricity generation is projected to grow by nearly 50 per cent between now and 2030 to meet growth in demand.
We simply cannot maintain supply reliability for households and businesses if we don’t invest in electricity supply infrastructure. That investment can be paid for only with higher electricity prices. During the past three years, prices have risen by about 35 per cent. These price rises have nothing to do with the CPRS.
Network costs already make up about half the final electricity bill for households and small businesses in Australia.
These costs will come under further pressure as we confront the need to connect new renewable and gas generation regions to the existing electricity market and respond to more demanding technical and health and safety specifications, for example, to improve safety following the Victorian bushfires.
Source: The Australian
