australia: December 07, 2010
Energy Australia is warning of an increase of $600 million in power bills next year. They claim the Government has underestimated the number of certificates it will issue for installing small scale energy programs for homes and businesses. The NSW Government-owned power company, in a submission to the Government, is also warning that the estimate from which the renewal energy certificate scheme is based is “likely to prove far too modest”.
The small scale renewable energy scheme is scheduled to begin on 1 January 2011. Each certificate will be worth $40 and is being issued to encourage the installation of photovoltaic cells and solar hot water systems.
Original modeling showed that up to 11 million certificates would be issued next year. Energy Australia, backed by various business interests, claim this will “blow out” to about $30 million due to the take up made of solar energy being greater than anticipated. Under the scheme electricity retailers are required to buy back all certificates issued thus leading to speculation that the cost of such certificates will ultimately be passed along to the consumer.
In October, Energy company AGL warned of a 3 percent increase in power bills. Paper and packaging company Amcor has advised that the number of certificates should be capped or the prices should be reduced by one-half to $20. Soon to be ex-Premier Kristina Keneally recently slashed the fee in tariffs the State Government paid to those with solar energy systems from 60 cents to 20 cents per kW of energy fed back into the grid. This move was motivated by a higher than expected take up of the Government solar bonus scheme.
The small scale renewable energy scheme was a consequence of the revamped renewable energy target which aims to have 20 percent of the country’s power generated from renewable sources by 2020. That scheme was split in two, being large and small scale, this year after big companies such as AGL complained that savings certificates were being handed out, but dwindling in value. The continuing drama that is electricity pricing in Australia will continue for a long time to come and consumers are going to be poorer from the experience.