E&OE….
Topics: Record drop in electricity prices, Renewable Energy Target
STEVE PRICE:
The Environment Minister is on the road in Sydney tonight’s on the line. Greg Hunt, good evening to you.
GREG HUNT:
And good evening Steve.
STEVE PRICE:
Was that a bigger drop than you had predicted? Because during the election campaign when you were claiming that the electricity prices would drop by, I think 10%, the then Government tried to suggest that that was not going to happen.
GREG HUNT:
Look, it’s come in almost exactly in line with what we were saying if you look at what’s happened for New South Wales residents – if you’re with Lumo Energy you had an 8.7% reduction in terms of the carbon tax being taken off. Energy Australia – 8.9%, Simply Energy – 10%, and if you were with Simply Energy for small business, a 9% reduction and if you’re using gas similarly we’ve had very large reductions.
AGL, Origin, Energy Australia are all between 7.4 and 7.8 per cent for small business operators. So basically the whole carbon tax has been taken off the bills and we’ve had the largest ever drop in the records of Australian electricity prices.
STEVE PRICE:
And that’s real savings, real money in people’s pockets. I mean particularly business. I mean, it’s good, it’s great for individual householders but for small to medium businesses that must be a big circuit-breaker for them in their budgets, in their financial budgets going forward.
GREG HUNT:
It’s a big factor and the more a business may be involved in manufacturing, the higher the savings. Origin Energy has put out guidance that they have a 15.5% saving for commercial and industrial customers, off their electricity bills.
So these are big numbers when you actually come to a business which is operating on a margin, which has been fighting higher costs and whether it’s a pensioner who’s listening tonight, a family who might be doing it tough or somebody on a farm who’s had to run a dairy with higher electricity prices or gas prices, or somebody who’s using fertiliser which has embedded costs. All of these things come off and what was really interesting and I made the point today in the Parliament.
I’ll give you a comparison – under Labor electricity prices went up, according to the Bureau of Statistics, 101% over their six years. We’ve just had in the last quarter the largest drop in electricity prices since records have been kept in Australia.
STEVE PRICE:
You are going to try and negotiate with Labor to bring back, or bring down, the Renewable Energy Target. I’m not sure that average Australians actually understand what the Renewable Energy Target is and what it’s actually going to mean to them. You talk about a real 20% so by those words I gather what you’re saying is that by a certain date, 2020, then a certain number of our power needs to be generated by things other than coal-fired power stations.
GREG HUNT:
That’s a pretty good description, that’s an almost perfect description in fact. Essentially what happens is that there’s a law, the renewable energy laws in Australia which say that by 2020 we’re looking for 20% of all electricity generated in Australia to be coming from renewable energy.
And so the problem is a really high figure was set which was going to generate something which would have much higher impact on prices, on electricity, in particular for businesses. We’ve always been committed to this 20%. We’ll deliver that but not a figure which is likely to lead to a very, very high tax on Australian families. It’s the equivalent of a $90 per tonne carbon tax. The Australian people have just voted out a $25 a tonne carbon tax. I don’t think they want a $90 a tonne carbon tax.
STEVE PRICE:
Not surprisingly, clean energy producers are not happy. They, on the front page of the Sydney Morning Herald today used fairly inflammatory language saying that the industry, the proposal would be devastating for their industry and would cost thousands of jobs and millions of dollars.
GREG HUNT:
Look, there’s still a very, very significant capacity for growth in this sector. What we’re proposing, and some will say this is far too generous, I don’t, I think it’s a good balance, is there would be a 60% growth in large renewables and a near doubling in household solar under what we’re proposing.
So that is a very generous proposition but what we don’t want to see is this risk under Labor’s scheme of a carbon tax of $90 per tonne equivalent. You know, almost four times greater than the carbon tax that, you know, the Australian people just voted to get rid of. And that would be a very odd thing to do and look, I actually think that this is one area where we can get bipartisan support with Labor.
There’s a bit of noise and light and fury, but at the end of the day they say that they want to help aluminium, they know that’s because there are impacts. But we also want to help mums and dads and pensioners and just get a balanced outcome, not a $90 per tonne carbon tax.
STEVE PRICE:
Two final questions – what’s the percentage of our energy that is currently produced by renewables?
GREG HUNT:
It’s about 16%.
STEVE PRICE:
So you’re not that far off.
GREG HUNT:
No, no, no we’re not that far off. There’s a lot of, you know, the old Snowy Hydro and Tasmanian Hydro scheme which has been built for decades and decades and then on top of that we’re now building additional forms of renewable energy, whether it’s solar or other things.
But there’s plenty of opportunity for growth but we simply don’t want to see this $90 per tonne carbon tax and you can see what has happened with the removal of a $25 a tonne carbon tax to electricity prices. To reverse it not just, you know, to whack it back on but to nearly quadruple it would just be very, very bad for families and businesses.
STEVE PRICE:
Just finally, you kept talking about aggregate energy consumption’s fallen from the predicted amounts – what’s causing that fall of production. Is it, was it the increased prices due to the carbon tax or was it because of a slowdown in the economy, or both?
GREG HUNT:
Both. So the Australian Energy Market Operator, they’re the guys that really do all of the analysis about electricity, say that half of the reduction in demand compared with what we’d expected is due to losing manufacturing overseas, such as aluminium, you know, just the loss of Australian jobs, but no benefit to those jobs and those emissions go elsewhere, but we don’t have the jobs here in Australia.
About one-sixth was due to the price rises because electricity is such an essential service people don’t’ tend to get rid of their electricity, they just give up on, you know, pensioners, the fortnightly meal out together or for families, you know, a little trip in the caravan.
So those sorts of things they give up on. About a sixth was due to seasonal factors, about a sixth was due to the uptake of solar. So the price hurts, but it doesn’t really drive down consumption. What it does do, for households, what it does do is it drives off manufacturing and jobs to other countries.
STEVE PRICE:
Good to talk to you, thanks for your time.
GREG HUNT:
Cheers Steve.
STEVE PRICE:
Environment Minister Greg Hunt.
(ENDS)