Western Australian Treasurer blames electricity price rises on renewable energy in Budget speech.
Commentary by Prof Ray Wills, Chief Executive of the Sustainable Energy Association

Western Australian Treasurer Christian Porter has delivered a 2011 Western Australian State Budget that contains no new news for sustainable energy, merely completing prior commitments to renewables and only empty spaces in the forward estimates were Government funding commitments to renewables might otherwise be found.

Only yesterday (18 May 2011) a joint announcement from Western Australia's Environment Minister Bill Marmion and Energy Minister Peter Collier claimed the "State Government believes WA should become a world leader in low emissions technologies." The Sustainable Energy Association of Australia asks how will Western Australia achieve this without some significant financial commitments by the Barnett Government?

The only mention of the word ‘renewable’ was early in the Treasurer’s Budget speech as a curse to blame “increases in electricity costs” on factors including “the Commonwealth Government's renewable energy policies, which have imposed costs totalling hundreds of millions of dollars on the State.”

The Treasurer clearly contends in his speech that the tiny 3 per cent share of renewable energy generation that this state has managed to encourage has somehow contributed significantly to the electricity price rises in Western Australia.

The fact is that renewable energy has had little impact on recent electricity price rises in Western Australia. Previous Western Australian Governments failed to increase the price charged for electricity over a 17 year period, despite increases in costs, and in particular the cost of fossil fuel and network expansion pressures. Well, in the speech only a sentence or two later, the Treasurer acknowledges that apparently, yes, that had a bit to do with it, too.

Concerns in the community about increases in energy pricing is raised by the Treasurer and are completely understandable – these concerns can be addressed effectively by offering assistance packages to battlers that improves their home energy efficiency. And if this is combined with provisions to install renewable energy on the roof together with a feed in tariff for domestic generation and for small and medium enterprises, many will avoid the energy price as they will be generating and selling their own energy.

However, the only move from the Western Australian Government is to reduce the feed in tariff that supports the uptake of renewable energy on homes. A new rate of 20 cents per kilowatt hour (kWh) will apply to all applications received from 1 July 2011. The State Government has also announced that the scheme will close when the total capacity of renewable energy systems installed under the feed-in tariff scheme reaches 150 MW - to date almost 70MW of capacity have been installed.

From an industry perspective, SEA expected and indeed advised the Government some months ago to plan to ease back the tariff – subsides from Government should be about supporting market start-up, and continuous falls in solar pricing shows Federal and State incentives are indeed stimulating the market. But changes to subsidies need to be strategically rolled back to establish a glide path for market development, not coarsely readjusted.

Western Australian Treasurer blames electricity price rises on renewable energy in Budget speech.

SEA Media Release – 19 May 2011

Editors notes:

1.             Western Australian Budget 2011 http://ourstatebudget.wa.gov.au/

2.             The Sustainable Energy Association of Australia (SEA) is a chamber for all enterprises from all industries supporting sustainable energy, and the fastest growing energy industry body in Australia. www.seaaus.com.au.