A report in the Australian Financial Review (AFR) yesterday (4 April 2012) suggested two Western Australian Government Enterprises, Synergy and Water Corporation, have been asked to consider contributing to a $90 million dollar bailout of the ongoing saga of the Bluewaters coal fired power station and Lanco Infratech's need for subsidies to support the project.
The AFR report "WA looks at 90 million lifeline for Indian Power Group" has highlighted the inefficiency of coal-fired power to be a viable business in WA without significant State Government subsidies that are likely to add additional impost on consumers.
As a business chamber, the Sustainable Energy Association of Australia does not endorse any state lead bailouts designed to support poor private business dealings.
SEA is concerned the AFR report suggests that one government business has agreed to do this.
The cost of any such funding support paid by these the utilities to a private company would be passed on to consumers and result in further increases in the cost of living.
‘The support to Lanco provides a bailout to what appears to be a poor commercial decision and now it seems tax payers are being asked to foot the bill through their utility bills,' says Professor Ray Wills, SEA Chief Executive.
‘Competitive businesses suffer when one single competitor in the market is subsidised, and such a subsidy has the potential to negatively impact the growth of competitive generation sources.'
‘The $90 million being sought could be used to fund improvements in transport through light rail or the development of projects utilizing renewable energy resources to provide additional energy to the grid.'
‘That level of investment could easily support a new 30 MW WA Solar PV Plant with based on a fair market value power purchase agreement, building a power plant that would not have any inflationary rises in price into the future because the price of renewable solar fuel is free,' says Prof Wills.
Meanwhile, late last month, Premier Colin Barnett has said all WA utilities bills will show a a breakdown of the carbon tax contributes to their household bills from 1 July 2012.
‘SEA challenges the Western Australian Government to include the cost of this and other subsidies provided to the coal supply industry to also be included on utility bills. Perhaps the Tariff Equalisation Fund - cross-subsidy payments that South West residents and businesses pay to allow remote customers to access electricity at the same rate - should also be included,' says Prof Wills.
Will cost of bailout of coal miner be itemised on WA household utility bills?
SEA Media Release - 5 April 2012