From the Conversation, again……
Tony Abbott has said he will scrap the carbon “tax”, leading to a fall in electricity prices.
In his budget reply speech he stated:
We will abolish the carbon tax – because that’s the quickest way to reduce power prices and take the pressure off cost of living and job security.
But will removing the carbon price really lower electricity prices, and if so, by how much? A reasonable answer would be by around 5%, with an upper boundary of about 10%.
In Victoria, the state with the highest emissions intensity, carbon costs add 2.2 cents per kilowatt hour to electricity costs. Based on typical Victorian consumption of 5000 kilowatt hours per year per year, removing the the carbon costs should equate to a reduction of roughly $110 per year.
Now, this is interesting. I don’t live in Australia so there are things I don’t know about this. But, there are things I do know just by reading the last paragraph. Victoria? Victoria isn’t Australia. If 2.2 cents is 5%, then the Aussies are paying about 44 cents a kWh. (Their dollar and the US dollar are very close in value.) Seems a tad high to me. I would also say that 5000 kWh per year seems awful low to me. But, that’s probably why they didn’t mention the average rate.
The Australian Energy Market Commission issued a report in March analysing trends in electricity prices and their components. One component is wholesale costs, which increased 14% over 2011-2012 to 2012-2013, the period in which the carbon price was introduced.
However wholesale costs only account for around 37% of retail electricity prices.
Other major components of retail prices are transmission costs, distribution costs (“poles and wires”), and retail costs (which include costs like the Renewable Energy Target).
Over the same period transmission costs went up 27%, distribution by 11% and retail costs by 17%. These components are independent of the carbon price, and account for the majority of hikes in retail electricity prices.
Uhmm….. no, they are not independent of the carbon price. Because they instituted a cost on carbon emissions, this caused the utilities and providers to seek alternative sources of energy. Because those alternative sources are not located exactly where the coal generation plants are, there must be an increase cost in transmission and distribution. They have to run new poles and wires to get to the new source……… caused by the carbon price.
Then the Conversation proceeds with some insipidly stupid rationalization……
It’s worth remembering too that even without the carbon price, electricity prices are predicted to rise. Climate Change Authority research suggests that without the carbon price, the rise would with be slightly smaller, with retail electricity prices just 6% lower.
Oh, because the price of electric is suppose to rise, then one shouldn’t try to contain such costs. Makes sense to me.
All the while Australia exports coal like no other. It’s a good thing there are no poor people in Australia. This would seem evil to me if there were.
I’d go to antagonize them about this, but, they’d prolly just close the comments.