Posted by Big Gav
The SMH has an article on comments by Origin Energy CEO Grant King predicting power prices in eastern Australia will triple over the next 10 years if climate policy remains deadlocked - Power price surge fuelled by stalemate over policy.
The chief executive of Origin Energy, Grant King, says uncertainty about energy policy is driving up industry costs, but without a carbon price Australia will fail to meet a government target to cut 2020 emissions by 5 per cent from 2000 levels.
In a sweeping attack on the stalled debate over emissions trading, Mr King said indecision on carbon trading was deterring business from investing in all but the safest power plants, which are those powered by wind and gas.
Building these new plants requires hefty spending on infrastructure such as new power wires and poles.
But he said these costs had not been factored into the price of electricity.
''We think it's quite possible that by 2020 the cost of energy to consumers could be two to three times what it is today,'' he said at a business lunch in Sydney yesterday.
''Increases in transmission and distribution costs, driven by current policy settings, will substantially increase the cost of electricity to consumers.''
A trebling in power prices would push the average annual bill for Energy Australia customers to $3771, compared with $1257 now.
Energy Australia is the dominant government-owned retailer of electricity. NSW power prices are already set to jump by as much as 60 per cent in the next three years because of transmission and carbon costs, the Independent Pricing and Regulatory Tribunal said last month.
At the same time, Mr King said higher power costs would bring few environmental benefits, because emissions would remain stubbornly high until business received a clearer signal from government.
Relying solely on renewable energy and attempts to cut household power consumption was not enough to cut 2020 emissions by 5 per cent compared with 2000 levels, he said.
For example, meeting the 5 per cent target would require households to cut energy use by 20 per cent by 2020 and a doubling in the amount of renewable energy generation installed by 2020. This was a ''huge'' challenge for Australia, he said.
''We will fall well short of that target unless we go back and put in place policies designed to change the way we generate energy,'' he said.
The comments come as the federal government prepares to introduce the twice-rejected carbon pollution reduction scheme to the Senate as soon as next month.
Origin is viewed as a beneficiary of the scheme because it does not own any coal fired power plants, which are the biggest polluters.