Solar tariff increase welcome, but energy sector should be re-nationalised to stop failure of deregulation

The Greens NSW energy spokesman Jeremy Buckingham welcomed IPART’s announcement today of their final determination of the solar tariff for 2017-18, with the benchmark price increased to 11.9 – 15 cents per kilowatt hour, up from 5.5 – 7.2 cents per kilowatt hour.  However, he noted that the reason for the tariff increase was the failure of privatisation and deregulation that have led to a massive increase in wholesale electricity prices.

“The Greens welcome the increase in the price paid for rooftop solar in NSW, but will continue to move for IPART to factor in an implicit carbon price and avoided health costs, to recognise the true benefit of solar power and increase the tariff to reflect those benefits, as they do in Victoria.  It is estimated that this would lift the tariff by a further 4.3 cents per kilowatt hour.

 “Households and the economy are now being punished for three catastrophic policy failures:  the unregulated move into LNG exports; the privatisation and deregulation of the energy sector; and the failure to have a serious policy for the transition of the energy sector to renewable energy,” said Greens MP Jeremy Buckingham.

“The LNG export facilities at Gladstone are like a giant vacuum cleaner sucking up gas from the domestic market and causing a massive price hike not only for gas, but also for electricity for which the price is often set by gas generators. This is a massive market failure.

“The NSW Government has privatised the energy sector and has irresponsibly abolished the IPART regulated gas price at precisely the wrong time, as well as regulated electricity prices.

“It’s time to admit that privatising essential services that are monopolies, or at best oligopolies, has failed with Australian households paying some of the highest prices for energy anywhere in the world despite an abundance of natural resources – both renewable and non-renewable. 

“We should look seriously at re-nationalising the energy sector to end the profiteering and to ensure a swift transition to clean energy to deal with climate change.

“The regulated price was effective in constraining price hikes, now everyone is at the mercy of profiteering in a market dominated by an oligopoly.

“The NSW government predicted huge falls in the gas price with deregulation, but now we have big hikes in price.  Energy Minister Don Harwin should admit his government got it terribly wrong and move to have IPART re-establish a regulated price.”

23 June 2017