Let’s talk about your electricity bill

14 November 2013

Let’s talk about your electricity bill. We know it’s on your mind!

In recent years electricity bills have been rising. Some people are blaming investment in renewable energy but did you know that the biggest reason it’s been going up due to investment in the poles and wires that carry the electricity to your house or business, and not the impact of large scale renewable energy?

The investment in poles and wires has been made due to what is known as reliability standards. In simple terms this means that on hot days you will remain connected to electricity for more time than you would have in the past.

Historically, it has been on really hot days that our electricity network has been the most stressed – this is known as peak demand.

While in the last two years there has been a huge drop off in peak demand due mainly to the enormous uptake of solar panel installation. This uptake was not expected by the network owners and as it turns out, some of their investments were unnecessary. This is why people refer to network upgrades as gold-plating – we now know that solar panels have reduced peak demand and that some investment was not needed.

Alan Moran from the Institute of Public Affairs penned a piece in The Australian recently (Terminate Renewable energy schemes now) attacking renewable energy and urging the government to get rid of all policies that encourage renewable energy.

His comments show that he either does not understand how the electricity market works or is getting the wrong advice.

The reality is that everyone in the electricity industry knows that renewable energy is pushing down the wholesale cost of power. This is why the fossil fuel generators are lobbying so hard to get rid of it.

Yes, retail electricity bills have gone up. But large scale renewable energy accounts for just 2% of your bill, or $26 a year, and this is offset by the drop it causes to wholesale prices. It’s the poles and wires which have caused the huge increases.

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