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Way to cheaper electricity littered with false conceptions

By Graham Young - posted Tuesday, 2 October 2018

While electricity prices are a potentially potent electoral issue, voters are so confused about the causes, that it will be very difficult for any government to persuade them of the cure.

A failure to argue the facts, and a desire to kick the renewables can down the road, has caused the problem

The space has been filled by renewable energy lobbyists, who have a vested interest in pushing more unreliable renewables, which are a significant part of the problem, and virtue signalling corporates, who are trying to minimise trouble and maximise profit.


Both have pushed a line which is profitable for them but ruinous for the country.

It’s not just a problem for the current government, but one that a Shorten opposition, which has contributed to the disinformation, might have to face should it win the next election.

Earlier this year we conducted online qualitative research into public perceptions of issues in power generation using a virtual focus group of 1257 respondents.

 Forty-seven per cent of voters report difficulty paying higher power prices, so the issue is hot.

The major problem for good policy is that a large proportion of the public believes that high power prices are due to privatisation, enabling corporate greed, and facilitating private companies to game the system. They don’t blame renewables or network prices.

In fact, the causes are multi-factorial and include the increasing use of intermittent renewables, as well as gaming of the system by both private companies, and state governments. More privatisation and less concentration of ownership might have ameliorated these trends, but they are certainly not the cause.


Over the last 10 years household electricity prices have risen 35% in real terms. The recent ACCC report allocates the blame to networks (35%), wholesale electricity prices (22%), environmental subsidies (20%), retail costs (3%), and retail margin (16%).

Renewables aren’t singled out, but they are the whole of environmental subsidies, and some portion of networks and wholesale electricity costs, making them very significant.

Yet 54% of our respondents ranked privatisation as the first or second biggest cost factor, followed by government (47%), profiteering (39%), networks (32%) and only then by renewables (28%).

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This article was first published by The Australian.

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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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