Feeds

Ditching renewables will punch Aussies in the wallet – Bloomberg

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

Secure remote control for conventional and virtual desktops

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
Hello, police, El Reg here. Are we a bunch of terrorists now?
Do Brits risk arrest for watching beheading video nasty? We asked the fuzz
Munich considers dumping Linux for ... GULP ... Windows!
Give a penguinista a hug, the Outlook's not good for open source's poster child
Detroit losing MILLIONS because it buys CHEAP BATTERIES – report
Man at hardware store was right: name brands DO last longer
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
UK government accused of hiding TRUTH about Universal Credit fiasco
'Reset rating keeps secrets on one-dole-to-rule-them-all plan', say MPs
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Yes, but what are your plans if a DRAGON attacks?
Local UK gov outs most ridiculous FoI requests...
EU justice chief blasts Google on 'right to be forgotten'
Don't pretend it's a freedom of speech issue – interim commish
This'll end well: US govt says car-to-car jibber-jabber will SAVE lives
Department of Transportation starts cogs turning for another wireless comms standard
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.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.