The Abbott Government is instigating a successful policy bait-and-switch against the electorate, to the benefit of dirty energy providers. Since taking office, the new Government has decried established policies designed to clean up the energy sector as unaffordable, while perusing a plan that is designed to preserve the fledgling business model of aging dirty energy providers.
The finer details of energy markets are convoluted, too complex to be conveyed in a simple one-sentence pitch to the electorate. Previous Governments struggled to do so effectively and suffered politically because of it.
Trying to explain the energy market to voters is a political death trap, akin to explaining how a Goods and Services Tax may apply to the ingredients of a birthday cake.
The Abbott Government has heeded these lessons, and has instead approached the selling their own flavour of energy reform, or lack thereof, with simplicity. Highlight the costs of clean energy schemes, and ignore the complexities that exist in the energy market that make successfully driving electricity prices down a political impossibility.
It seems the Government considers that the best it can do is appease the major coal and gas energy providers, companies that are offering a huge amount of new investment in infrastructure. The fact that this new infrastructure is targeted towards the export market, and will do little to make domestic energy prices cheaper, is seemingly unimportant.
Current rhetoric around the renewable energy target, and the growing likelihood that this scheme may be watered down, if not completely abolished, is a perfect case-in-point.
The Renewable Energy Target has stimulated billions of dollars worth of investment in clean energy projects in Australia, and the vast majority of Australians support it.
Despite this, the Prime Minister has spoken out against it, recently claiming the “renewable energy target is causing pretty significant price pressure in the system” and will move to have the scheme reviewed this year.
Irrespective of the assertions of the Prime Minster, a recent review of retail electricity prices, conducted by the Australian Energy Market Commission (AEMC), concluded the Renewable Energy Target made the smallest of contributions to electricity prices paid by consumers.
The AEMC found that the cost of the Renewable Energy Target currently represents just 4 per cent of average electricity costs. Over the next two financial years, the cost of the scheme is projected by the AEMC to fall to less than 3.2 per cent.
The AEMC again exposes the Prime Minister’s assertion that the source of price pressures is renewables as being false. It is widely documented that the major cause of rising electricity prices is the growing cost of network infrastructure. The AEMC found that network charges represent over half the cost of the price paid by consumers.
The increase in network costs alone over the next two years will exceed the total annual cost of the Renewable Energy Target. If Tony Abbott is concerned about electricity prices, he is demonstrably ignoring the elephant in the room.
If it can be so clearly established that the cost of the Renewable Energy Target is not the evident priority, it is important to ask why the Prime Minister, members of his cabinet and closest advisors are being so publically hostile against it.
Confidant and head of the Business Advisory Council, Maurice Newman, claimed that wind farms were “a crime against the people”. Extreme language used against a clean technology competing with solar photovoltaics to be the fastest growing source of electricity generation globally.
It is in Australia’s interest to be proactive within the renewable energy sector. The technologies of wind and solar are quickly becoming the cheapest way to source energy globally.
Incumbent energy players are helping the Government sell a solution to a problem that doesn’t exist, in the hope they can secure a few more years of profitability. They are participating in the public relations battle to convince you that it is better to save what little you can now, instead of investing to ensure that Australia’s future economy and infrastructure are environmentally sound.
It must be acknowledged that the removal of the carbon price, and the winding back of the renewable energy target are unlikely stop electricity bills from rising. Rather, these actions are done to satiate an ideologically driven cabinet that owe their political success to a hard-line attack against efforts to tackle climate change and incentives to clean up our economy.
Government needs to develop policies based on evidence and informed by the advice of experts. Otherwise, it risks establishing for itself a political legacy so clearly stationed on the wrong side of history. A legacy built from a strategy of promises to appease businesses and delivered through masked messaging to the Australian people.
Michael Mazengarb is a post-graduate student Australian National University, completing a Master of Climate Change. An environmental mercenary, he has worked numerous roles pursuing environmental conservation and climate change action. Michael edits Omnishambles, and generally writes with a progressive perspective.
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