Energy retailers and generators will be handed “unprecedented power to… control prices and drive up bills” under a new deal announced by the Federal Government, the Electrical Trades Union (ETU) has warned.
On Tuesday, Malcolm Turnbull revealed the Federal Government will accept a recommendation of the Energy Security Board (ESB) for a National Energy Guarantee to deliver more affordable and reliable electricity for households and businesses. The announcement follows the release of an ACCC report which found the rising cost of energy since 2007-08 is putting business under “unacceptable pressure”.
“The independent Energy Security Board advises the Guarantee will give certainty to investors and therefore encourage investment in all forms of power,” the Prime Minister said. “This means electricity bills will be lower than currently forecast and lower than they would have been under a Clean Energy Target. The Energy Security Board estimates typical household bills will fall by an average of $110-$115 per year over the 2020-2030 period.”
“Past energy plans have subsidised some industries, punished others and slugged consumers. The Turnbull Government will take a different approach.
“The National Energy Guarantee will lower electricity prices, make the system more reliable, encourage the right investment and reduce emissions without subsidies, taxes or trading schemes. It is truly technology-neutral, offering a future for investment in whatever technology the market needs – solar, wind, coal, gas, batteries or pumped storage.
“Unlike previous approaches, we are not picking winners, we are levelling the playing field. Coal, gas, hydro and biomass will be rewarded for their dispatchability while wind, solar and hydro will be recognised as lower emissions technologies but will no longer be subsidised.
“Importantly, this plan builds on the Finkel Review, which recommended the creation of the ESB that has now recommended the National Energy Guarantee. The Government will now work with the ESB and the states through COAG to implement the National Energy Guarantee.
“As well as delivering a better deal for households, the plan will support business, particularly emissions intensive, trade exposed firms. The Guarantee builds on our existing energy policy which involves the retailers offering consumers a better deal, stopping the networks gaming the system, delivering more gas for Australians before it’s shipped offshore and the commencement of Snowy Hydro 2.0 to stabilise the system.”
ETU national policy officer Trevor Gauld said the announcement “signals the triumph of spin over substance” and that the guarantee will see “bills continue to rise and private electricity retailers offshoring even more profits”.
“At a time when private retail and generation companies are squeezing ordinary Australians for more than they can afford, the Prime Minister has decided to hand them unfettered control of Australia’s energy market,” he said.
“It does nothing for energy users, and fails to deliver a just transition for communities who rely on soon to expire coal-fired power plants.”
“The policy hands total market control to private retailers, many of which also operate in the generation space, and puts them in a position of unprecedented power to control energy prices.
“We have seen profiteering from generation and retail companies who are double-dipping from both ends of the energy process. How is it possible that the government would reward this behaviour by handing them unprecedented control of long-term energy security and pricing? The balance between the people paying the power bills and the people charging them for electricity has shifted even further in favour of big business.”
See also: Soaring electricity costs putting SMEs under ‘unacceptable pressure’, ACCC inquiry finds and Rising energy costs curtailing SME growth; Ombudsman blames price gouging, politics.