Carbon price tug-of-war
Under the carbon price the government will collect more than $7 billion in revenue by encouraging Australians to reduce their emissions, yet at the same it will pay almost twice as much in subsidies to encourage the use of fossil fuels.
If subsidies are greater than penalties, how effective are current policies as tools for changing behaviour? Is it really a case of “polluter pays” or more like “pay the polluter”?
Liddell is the oldest power station in Australia. It is particularly vulnerable to breaking down in hot weather when demand is high, and electricity is most needed. It has suffered four major breakdowns so far this year. Two of these were within two hours of peak demand on very hot summer days. The continued reliance on Liddell will lead to less reliable and more expensive energy in NSW and will undermine investment in new capacity.
Australian Energy Market Commission is conducting a Reliability Frameworks Review, which is looking at how to improve reliability in the National Electricity Market.
In our submission The Australia Institute argues that the best market reform under consideration by the Commission is wholesale demand response. Demand response allows energy consumers to reduce or delay their consumption of electricity and sell that conservation into the market.
Wholesale demand response could improve reliability and reduce costs by lowering the price of demand peaks. It may also reduce emissions by displacing fossil fuel generation during peaks of demand.
A new report from The Australia Institute’s Climate & Energy Program shows that a Federal Government proposal to protect households from high power prices is being undermined by the official electricity rule-setting body.
Energy Minister Josh Frydenberg has proposed to change market rules to prevent energy retailers offering ‘discount’ deals that are actually more expensive than basic deals.
The report finds that Minister Frydenberg’s proposal has been watered down by the Australian Energy Market Commission (AEMC).