Sabra Lane: Electricity prices are back in the headlines as the cost of the transition away from fossil fuels to renewable energy becomes a political football again. A new report from the Australian Energy Market Commission suggests prices could in fact fall 5 per cent during the next five years amid a surge in renewable power. But it warns there could be a sting in the tail from 2030. Energy reporter Daniel Mercer has the story.
Daniel Mercer: Power bills and how the energy transition affects them is a political live wire for voters and something Federal Opposition Leader Sussan Ley has recently been keen to prosecute.
Sussan Ley: Of course the government is rushing the renewables rollout. The blowing out of costs for the poles and wires, for the transmission infrastructure, for turning the beautiful wind and sun into dispatchable power at the source where you need it is incredibly expensive. A
Daniel Mercer: new report from the Australian Energy Market Commission offers a somewhat different view. The commission, which sets the rules that govern the national electricity market covering Australia's eastern states, projects the prices consumers pay for a kilowatt hour of electricity will fall 5 per cent over the next five years. The reason? More renewable energy.
Anna Collier: We're looking at what is planned to be built over those five years and if we can achieve that deployment of renewables then that will bring down the wholesale price of electricity.
Daniel Mercer: Anna Collier is the Commission's Chair. She says another boon for consumers is the trend towards electrification, which involves households running everything from their cars to their cooktops on electricity rather than fossil fuels.
Anna Collier: So what they might spend today on electricity, gas and petrol, they can save up to 90 per cent if they're able to electrify.
Daniel Mercer: For all these upsides, Anna Collier acknowledges there are plenty of risks ahead. She says delays to renewable energy projects such as wind farms and high voltage power lines needed to connect them to the grid are threatening to push up prices. That's because such delays risk leaving Australia relying more heavily on ageing coal-fired power stations and expensive gas plants.
Anna Collier: What we're seeing there in the planning is that the renewables build-out is slowing, so the mix of assets is such that we are seeing demand met more often by expensive plants such as gas.
Daniel Mercer: Anna Collier concedes many households simply can't electrify because they don't have the money or they don't own their own home. It's a point that's echoed by Matt Rennie, who co-runs consultancy Rennie Partners.
Matt Rennie: The ability to install that kind of equipment and to take advantage of those technologies is very much in echoed, being distributed around Australia.
Daniel Mercer: Matt Rennie says the growing divide between those who can electrify their homes and those who can't is just one of many complexities at the heart of the transition. Another is the cost of the new electricity system, which he says will be higher than one running on coal, but for good environmental reasons.
Matt Rennie: It's a much more complicated system. Solar, wind, firmed by batteries and then hydro running overnight. It's just a more expensive way of going about it. That's something we shouldn't shy away from.
Sabra Lane: Consultant Matt Rennie ending that report by Daniel Mercer.