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SA power bills rose less in past decade than coal states

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A new report charting Australia’s rising power prices over the past decade has undermined claims that South Australia’s high electricity prices have been driven by the state’s uptake wind and solar, showing that its rises have been less than in coal dependent states.

The argument that South Australia’s high electricity prices are a result of its pursuit of wind and solar is an argument prosecuted by conservative media and politicians alike, but the new report from the Australian National University underlines the fact that its prices have always been high, but have moderated since its investment in renewable energy.

The ANU report, commissioned by News Limited, but available here, shows that average household electricity bills have increased less in the renewables-rich state of South Australia over the past 10 years than they have in Australia’s eastern states, which are predominantly powered by coal and gas-fired generation.

south australia

Overall, the report finds that the average Australian electricity bill has increased by 108 per cent over the past 10 years, with annual bills averaging at $1,902 in December 2016, up from $916 in 2006.

“Only tobacco products have increased more quickly over this period,” the report notes, “and the large increase (t)here is due to significant increases in tobacco taxation.”

Of course, South Australia has not been immune to this trend of soaring power prices, but the report’s findings support what RenewEconomy has often pointed out, this is not a direct result of the state’s ambitious renewable energy target.

As the table above illustrates, SA has, historically, had high electricity prices – including 10 years ago, well before the roll-out of wind farms and solar panels made the state a world-leader in renewable energy penetration.

And what about the other states, which have been much slower to shift to renewable sources of energy generation.

Says the report, “there is some variation between the states with the greatest growth occurring in Queensland (136 per cent) and Victoria (119 per cent).

“In terms of overall electricity bills, the highest bills are, on average, in Queensland at $2,102 and Tasmania, at $2,181 per year,” the report says.

And, as David Leitch points out, those coal states may face even further rises in coming years, thanks to high wholesale electricity prices in the past few months.

Leitch estimated that $9 billion could be added to consumer bills, but only a small fraction in South Australia, which again would witness the smallest rises in percentage terms – again thanks to its investment in wind and solar.  

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  • john

    Why on earth is Tasmania so high is this because the result of the mainland connector being broken?
    As to the percentage figures what do they relate to % of money spent to upgrade % of income of each state?
    None of the percentage figures make any sense period.
    Bright light it reflects expenditure against income alright that is totally messed up as some states will have a higher income and some lower for peats sake if we take Dysart with an average income of $100,000 a year it is a pittance.

    • Farmer Dave

      Tasmania has high spending on electricity because it has a colder climate, has generally dreadful housing stock (from the thermal performance perspective), and because of a high reliance on resistive heating. Our peak electricity usage is still in the winter, for example. However, I note that Tasmania had the lowest real increase in expenditure on electricity over the decade, so the situation here is not dire – but could be better. In fact, I would like to see a plot of renewables penetration versus the 10 year real increase in expenditure, as I think it would show a significant correlation.

  • JIm

    Could have mentioned also that the view that SA policy / target – not RET – is the main driver is unjustifiable. SA’s renewable target was adjusted upward on the back of strong investment.

  • horsewhisperer

    The article does not prove you point, i.e. that retail prices have been less in SA because of a higher proportion of renewable energy. Looking at network determinations over the period, Ausgrid’s increase in expenditure dwarfs SAPN’s (in percentage terms). Most of the increases will be attributable to these increases in network costs. I also struggle to see how you can argue this with a straight face with the current and historical futures market.

    This is just spin and I do not think you’re helping the cause.

    • Mick

      re: current and historical futures market in SA vs the other states….Here’s the current baseload futures for cal year 2017
      QLD == $127.24
      NSW == $113.19
      SA == $112.00
      Vic == $100.45
      … Wouldn’t say that’s a particularly strong argument at the moment. Cap prices also high in QLD than SA.. Doesn’t particularly detract from your broader point – but can’t argue with a straight face that SA futures price are really any different to the other states.

      • horsewhisperer

        I’m not saying that they’re higher – just that they’re not lower. If the claim in this article were true, SA should be lower. Especially with more wind on the way in.

        • Mike Shackleton

          SA prices have always been high compared to the rest of the country and everyone’s bills have increased, SA hasn’t increased as much as the rest of the country. There was no claim that SA power prices have become cheaper.

  • trackdaze

    Hence such frantic jawbone action from the feds. Theyre seeing a wave of renewables sweeping the east coast.

    Energy security? None better than harvesting and storing your own.