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New analysis warns on flawed energy plan
New analysis warns on flawed energy plan
A new report prepared by independent energy analysts says a key element of the Federal Government’s proposed energy plan will not work, and may actually increase prices.
The report highlights significant flaws in Chris Bowen’s call for the states to impose price caps on coal, calling the measure ’impractical’, ‘unlikely to materially impact wholesale electricity prices, and finding it even ‘risks exacerbating electricity price increases’.
The report states that even if successful, the measure is unlikely to have any impact on household power bills for at least a year, and up to two years.
The report also highlights the relatively small influence of coal prices on energy prices: ‘’On average over the decade only 17% of the time”.
The report also indicates that high power prices are caused by a shortage of electricity supply and warns of a bleak winter next year due to a looming spike in global gas prices, delays in the deployment of renewable energy, and planned early coal plant closures.
The paper calls on governments to ensure more generation supply is available, including potentially delaying closures of the Liddell and Eraring coal power plants in NSW until enough renewable generation is ready to replace them.
NSW Minerals Council CEO Stephen Galilee said the report had been commissioned in an attempt to ensure the deliberations of governments on energy policy are as informed as possible.
“Like other industries, the mining sector is an energy user and extremely concerned about high energy costs, and we want workable solutions that will actually address the problem, “Mr Galilee said today.
“We also want a properly managed transition that delivers the reliable, affordable low emissions energy we have all been promised. However a price cap on coal is a short term political fix, not the solution it is being portrayed as, and it may actually make things worse.”
“Any plan that fails to address the coming electricity supply crunch is doomed to failure, and holds out false hope that energy prices will fall. It also puts public support for the energy transition itself at risk,” he said.
Report authors
Matthew Warren is a former Chief Executive of the Australian Energy Council, Energy Supply Association of Australia and the Clean Energy Council. He has spent the past 25 years working inside Australia’s energy and environmental policy debates. He has worked for renewables, coal and everything in between.
Kieran Donoghue has over a decade’s experience of energy policy in the UK and Australia. He has worked as a regulator, an industry advocate and most recently as an independent consultant. He has provided advice to retail and network businesses, government agencies and industry associations in Australia and New Zealand.
Matthew Warren is available for comment on 0433 680 957
NB: The full report is here
Contact: Brad Emery