Looking for Guidance on Electricity Pricing

By Ross McInnes, QDO vice-president

Energy prices are at the forefront of peoples’ minds these days with consecutive price hikes and wild fluctuations all part and parcel with what farmers have come to expect.

Australian Chief Scientist Alan Finkel released his much awaited Energy Report last week, but anyone who was expecting substantive information on which to base business decisions would have been left disappointed. The perceived trigger for conducting the review was the 50% rise in consumer electricity costs and the appraisal that this review would be better than doing nothing at all.

However, this is underwhelming for agricultural businesses that have seen their off peak charges rise by 300-400% in the last 8 years. I am sure the 4.9 million Queenslanders who contribute an average $265 per year to the Queensland Government’s $1.3 billion dividend from the electricity sector must be thinking the same thing.

Ever since we signed up to achieve the Renewable Targets to reduce CO2 emissions, there has been a complete vacuum of information coming from all levels of government. There is a universal view that renewable sources of energy will become cheaper by comparison. If the cost of electricity is continually gouged by 20 or 40 or 50% per year, then renewables will certainly appear cheaper.

In a recent survey by a national paper, it was revealed many people believe the price of electricity will increase if we don’t have a renewable target, but the facts do not back this up.

Professor Finkel said to the Senate the other day “renewables are cheaper than coal”, but he doesn’t know how much electricity prices will rise, which is difficult to comprehend.

If Professor Finkel is correct, why does solar get a guaranteed feed in tariff three times higher than the present cost of coal generation?

Some clear guidance from our elected representatives and scientists would be very welcome.