Feeds

Ditching renewables will punch Aussies in the wallet – Bloomberg

Spiking billions of future investment not a great idea, we're told

Next gen security for virtualised datacentres

The Australian government's plan to scrap its Renewable Energy Target (RET), pitched as a way to cut power bills down under, will drive up electricity prices. That's according to an analysis by Bloomberg New Energy Finance (NEF).

Bloomberg NEF believes that while the short-term (2015 to 2020) cost of the RET to consumers is AU$500m (£275m, $462m), in the longer term, scrapping the target will sting consumers AU$2bn (£1.10bn, $1.85bn) a year.

The reasoning is simple: the RET as it stands today has attracted investments that would add more than 14 gigawatts of power capacity from non-fossil fuel sources to the grid by 2020. Once in place, that eco-friendly generation would drive down wholesale prices, which should slash what consumers pay.

With the RET scrapped, the expected AU$32bn (£17.6bn, $29.6bn) in investment behind that 14GW would fall by 33 per cent, with a proportional impact on the amount of capacity. That would cut the cost to consumers by 53 per cent in the short term, but rises in wholesale costs after 2020 would push up consumer costs by 43 per cent.

Bloomberg NEF's head in Australia, Kobad Bhavnagri, told Business Spectator on Monday that the potential competition from renewables is what's behind the push by fossil-fuel generators to have the target scrapped. “Cutting or reducing the Renewable Energy Target is likely to result in less competition among fossil-fuel power generators and strong future increases in the price of electricity,” he said.

However, the analyst is far less critical of the option of deferring the RET, at least from an economic point of view. Should the RET merely be deferred from 2020 to 2025, Bloomberg NEF states, “the average cost to consumers will be three per cent higher than the current arrangement from 2015-20, but will be 15 per cent lower from 2015-30, as wholesale power prices are forced down further than in the current scheme and overall the mechanism works more efficiently.” ®

The essential guide to IT transformation

More from The Register

next story
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
Redmond resists order to hand over overseas email
Court wanted peek as related to US investigation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
NZ Justice Minister scalped as hacker leaks emails
Grab your popcorn: Subterfuge and slur disrupts election run up
We need less U.S. in our WWW – Euro digital chief Steelie Neelie
EC moves to shift status quo at Internet Governance Forum
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?