THIS should NOT be happening........

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Originally Posted by DiscoMick

Of course everyone pays for electricity, that's not the point.

RECs shift the balance from 'dirty' to 'clean' power sources. Where's the evidence that RECs are INCREASING the cost of power to consumers?

They are supplied without cost to renewable suppliers who then sell them to non-renewable suppliers, who are compelled to buy them. This is intended to (and does) raise the cost of non-renewable energy to closer that of renewable energy. This simply means that non-renewable suppliers are subsidising renewables, but via a bizarre mechanism that is intended to disguise the fact of this subsidy.

If it costs the non-renewable supplier more to produce power, this additional cost must be handled in one of the following ways - either simply pass the cost on, absorb it (i.e. the shareholders pay), or replace the non-renewable energy with renewables (which is the whole idea, of course), which they can charge more for in many cases anyway; and if not, it comes back to the other two alternatives. Take a guess which alternative is adopted!

The main factor in rising power prices seems to be distribution infrastructure upgrades, not building more power stations.

Agreed. But this does not mean the RET is not a factor.

Actually, with demand falling because more people are going solar, we have an oversupply of power. RETs encourage the switch to clean power and make dirty old power station uneconomic, hopefully leading to more shutdowns of antiquated equipment. Over time we will get a more efficient and cost-effective generation system.

The setting of power prices is a very complex process involving long-term contracts, spot prices, the costs of operating the business, profit targets, predictions about demand etc. Its not possible to single out any one factor in such a complex and ever-shifting equation.

So, I ask again, where's the evidence that RECs have significantly increased the cost of power to consumers?

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Since, in this state at least, all the coal generators are owned by the state government, they, as the shareholders, are certainly not going to suffer. The money has to come from somewhere, and the increasing cost of distribution per unit as usage falls allows the increased cost of energy to be disguised. For domestic and small business consumers, most of their bill is distribution, so any increase in cost of generation is hardly noticeable compared to the increase in cost of distribution. But for high energy consumption manufacturing, which uses power in such large quantities in one location that distribution costs become a much smaller part of the bill. Noticed any of these shutting up shop and moving overseas lately?

John

This will appeal to the greenies who love the ABC.

Fact file: How does the Renewable Energy Target affect your power bill? - Fact Check - ABC News (Australian Broadcasting Corporation)
Regards Philip A

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Originally Posted by PhilipA

This will appeal to the greenies who love the ABC.

Fact file: How does the Renewable Energy Target affect your power bill? - Fact Check - ABC News (Australian Broadcasting Corporation)
Regards Philip A

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Interesting. From the article you linked to:

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Energy retailers pass the cost of the RET on to consumers through retail pricing. Some of Australia's energy regulators - some states have their own, others are solely monitored by the national body - estimate the cost of the RET to consumers makes up between 1 and 5 per cent of power bills.

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It is interesting that not one of these studies take into consideration the costs of global change.
Then again science have not any credibility and their predictions if they are correct will affect next generations so bugger them we are OK :p

ROAM Consulting RET report 2014 summary:

Each Australian household will pay over $50 more for electricity in 2020 if the Renewable Energy Target is dispensed with. The total cost would be half a billion dollars extra for electricity in 2020 and up to $1.4 billion extra each year beyond then if the policy is removed.
The policy will generate approximately 18,400 new jobs by 2020 if retained in its current form. This is made up of 9700 jobs in large-scale technologies such as wind power and bioenergy and 8700 in household systems such as solar power and solar hot water.
In addition to the $20 billion of investment already generated, the Renewable Energy Target will drive a further $14.5 billion of investment in large-scale renewable energy out to 2020, as well as many billions more in household renewable energy such as solar power. If the policy is removed, most of this simply won't happen.
Removing the Renewable Energy Target means more of Australia’s electricity will come from coal and increasingly expensive gas-fired power, forcing up both power prices and emissions. For the Federal Government to meet its target of reducing emissions by 5 per cent it would need to find an extra 34.7 million tonnes of emissions abatement from other sectors without the Renewable Energy Target.
Due to reduced demand for electricity, the report estimates that renewable energy will deliver 22.6 per cent of the electricity consumed in Australia in 2020 as a result of the Renewable Energy Target's current policy settings.

This is the big picture from that article: renewable production costs are lower so over time wholesale prices should be lower, but what consumers pay depends on what power companies charge - its not a simple thing.


Miles George echoes that sentiment.
"Because we have no fuel cost, we always underbid the thermal generators and that tends to bring the price down. You can't see that in most states, except South Australia where it's blindingly obvious because in South Australia renewables have about 30 per cent... when it's windy the price goes down and it reduces the need for thermal generation. So it has a significant effect of depressing the wholesale price," Mr George told Fact Check.
"That effect more than offsets the prima facie cost of the certificates," he said. But there is a crucial flaw: "Consumers may not see the price reduction because retailers might not pass it on".
Modelling for The Climate Change Authority's review concluded that power prices from 2012-13 to 2020-21 with the current RET in place, and including the impact of the wholesale price drop, would be roughly $15 higher each year than what prices would be with no RET.
"All other things being equal, the modelling estimates that the higher the large-scale renewable energy target the greater the increase in renewable energy development and the lower the wholesale price. At the same time, however, there will be a greater number of renewable energy certificates created," the authority said.
"The net effect on energy consumer bills will therefore reflect the balance of the change in wholesale costs and change in certificate costs."

So, to say that again, whole costs should fall, but power companies may not pass that on to consumers. One reason for that is that State Governments continue to demand large dividends from their power companies to prop up state budgets, so the real problem in this is greedy state governments who use power prices as a hidden tax on consumers.

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Originally Posted by DiscoMick

........ One reason for that is that State Governments continue to demand large dividends from their power companies to prop up state budgets, so the real problem in this is greedy state governments who use power prices as a hidden tax on consumers.

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Or greedy voters who elect state governments that promise no tax increases and more government services?

In a democratically elected government, it is an error to apportion any but a small proportion of the blame for policies to those elected - blame them for incompetence, corruption, or not doing what they said they would do, but don't blame them for doing what they said they were going to do.

John

State Government revenues are under pressure for various reasons, so they're becoming even more dependent on the GST passed on from the Commonwealth. Therefore, they're reluctant to reduce the dividends they demand the power companies pay them, which are a hidden tax on consumers. This is true no matter what party forms government.

When a power company says, for example, that abolition of the carbon tax has 'saved' a certain amount, what they're really saying is how much they've decided to pass on to consumers by varying their charges. It's not automatic - its a choice.

As for voters not blaming governments, I think a very large number of people would disagree and would blame both the Abbott Government and some state governments for NOT doing what they promised and FOR doing many things they didn't promise. Judging by the polls, those governments are going to be hammered by unhappy voters at the next elections.

http://theconversation.com/from-the-...ustralia-30669

Tasmanians short-changed by Aurora on power price cuts


“This price reduction included the estimated carbon tax removal saving of 9.4 per cent, which was then partially offset by increases in other supply costs,” a letter to customers said.

Among the charges was a 2.08 per cent increase in the costs of providing billing and customer support with the introduction of competition.

The increase came despite there being no retail competition because of the State Government’s failure to sell the Aurora customer book.
:eek: :censored:
There was also a 0.63 per cent increase in the cost of physically delivering electricity offset by a 1.11 per cent reduction in other costs, including a renewable energy scheme administered by the Australian Government.

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Because we have no fuel cost, we always underbid the thermal generators and that
tends to bring the price down.

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They only can do this only because they get money/subsidies for RECs.
No RECs no price down. That is why they are desperate to keep the the RET.

I love half stories.
Regards Philip A