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Ditch RET to set economy free

By David Leyonhjelm - posted Friday, 29 August 2014


Electriticy bills are a huge worry for many Australians. In coming months a lot of people will receive the biggest household utility bills they have seen.

The latest figures from the Australian Bureau of Statistics show that in the five years to June 2012, Australia's retail electricity prices rose by 72 per cent with even higher increases in Melbourne and Sydney.

The Queensland Competition Authority's annual report revealed recently that 344 households were disconnected every week in the Sunshine State because of non-payment of electricity bills.

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Senators and MPs, however, don't need to worry about whether staying warm in chilly Canberra may send them broke. Perhaps if they had to pay for their own heating and airconditioning in Parliament House, it would concentrate their minds on the important discussion we need to have on the future of the renewable energy target.

The repeal of the carbon tax will help, but studies show that the RET has an even greater impact on the bottom line, reducing our living standards and the competitiveness of our entire economy.

The dramatic surge in power bills has been a major factor in the decline of our manufacturing sector and the loss of thousands of jobs. In a little more than 10 years the RET has rocketed Australia from almost the cheapest to almost the most expensive electricity in the world: Australian states occupy four of the top six spots beaten only by Denmark and Germany. These countries also are sapped pointlessly with punishing renewable energy policies producing small amounts of extremely expensive, intermittent power that has to be backed up by fossil fuel power anyway.

Contrary to claims by industry lobby groups and consultants representing Big Wind producers and merchant bankers, it is no coincidence that power prices went up so steeply when mandatory renewable energy targets were introduced. A report from the accounting firm Deloitte shows the RET will stifle the economy, cost jobs and drive up prices, and is a very inefficient means of reducing greenhouse gas emissions. It concludes that abolishing the RET would increase real GDP by $29 billion in net present terms relative to the RET continuation.

The chief beneficiary of the RET is the wind industry, which receives Renewable Energy Certificates worth about $30 for every megawatt of electricity it produces, on top of the price paid to it for electricity generated by wind turbines. The certificates are funded by electricity customers as a hidden charge on their bills. The net effect of this subsidy is to hand an additional $17bn of our money to these companies over 15 years for no measurable environmental benefit.

It is undisputed that despite being a mature technology the wind generation industry is not viable anywhere in the world without government or customer subsidies. It is just government- mandated corporate welfare.

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Grant King, chief executive of Origin Energy, one of Australia's largest electricity retailers with extensive interests in gas and wind energy generation, has said that the RET would be the main driver of electricity price rises by 2020 and that renewable energy costs now accounted for 14 per cent of electricity bills, up from 2 per cent five years ago; for larger users it is 30 per cent of their bills.

If Labor, the Greens and Clive Palmer really care for social justice they will not allow working families, pensioners and the disadvantaged to be ripped off by wealthy wind generators and will back the abolition of the RET.

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This article was first published in The Australian.



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About the Author

David Leyonhjelm is the Liberal Democrat Senator for NSW.

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