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Taking care of the next generation

The Days of Cheap Power Bills Are Over - 730 Report

Archived News, Posted on 08 Nov 2010

The following was a feature on the ABC's 730 Report screened 26.10.2010 the Reporter is Thea Dikeos. Your can find the report here

KERRY O’BRIEN, PRESENTER: Julia Gillard has blamed the sharp spike in electricity prices around much of the nation on an investment strike in the power generation industry, saying that a price on carbon was needed to bring stability.

But electricity generators say the days of cheap electricity are over.

They say over the next five years $43 billion needs to be invested to upgrade infrastructure across the country.

That investment has started to flow, but the cost of the upgrade is already being felt in higher power bills, forcing many Australians to rethink their electricity usage.

Thea Dikeos reports.

JUDITH CHAMBERS: I don't use a lot of electricity. I turn off lights as I go and only ever use my microwave. I never use my electric stove at all.

THEA DIKEOS, REPORTER: Like many of her generation retired school teacher Judith Chambers knows how to make do with little.

But despite her frugal energy consumption her recent bill doubled from $154 to $312.

JUDITH CHAMBERS: I nearly died when I saw that it was 312. But when I spoke to other people in the building, they all said it had either doubled or tripled.

THEA DIKEOS: She's on a pension of $590 a fortnight and budgets carefully for all her expenses, but the latest electricity bill has left her with no option.

JUDITH CHAMBERS: Yes I won't be using the heater at all anymore. Because I can't afford to.

MALCOLM ROBERTS, NATIONAL GENERATORS FORUM: Unfortunately the days of cheap electricity prices are over. We're going to face steadily rising electricity prices over the decade ahead.

THEA DIKEOS: Just how much electricity prices have gone up across Australia is difficult to assess. There's no national regulator that retains any data.

In New South Wales the independent Pricing and Regulatory Tribunal estimated that since July prices have risen between 7 and 13 per cent for standard contracts

MALCOLM ROBERTS: We're seeing a huge need for investment in transmission and network infrastructure - the wires and poles that brings electricity to the customer.

Over the next five years there is probably going to be required about $42 billion worth of investment in those networks. And that will all have to be passed through to consumers.

THEA DIKEOS: More than half the average electricity price covers transmission costs - the infrastructure that gets power to the household.

Electricity generators say these costs are driving prices up. Upgrades need to occur to old networks to prevent power outages, cope with increased demand and accommodate renewable energy sources.

MALCOLM ROBERTS: Well, we're moving from a historical model where we had a relatively small number of power stations generating a great deal of power connected to the grid to a more decentralised model, where we will have wind farms, in particular, across the country.

Their capacity will not be as great as the older traditional coal-fired power station. So we will have more wind farms, at greater distances in many cases from the grid, requiring connection.

THEA DIKEOS: It's not just pensioners who are feeling the squeeze.

New South Wales couple Alan Liddelow and his partner Rocky Cairns have made every effort to conserve energy by using low energy globes, turning off appliances at the wall and even reducing the time a kettle boils.

They even live in an architect designed home with good heating and cooling properties.

ALAN LIDDELOW: We don't have air conditioning, we don't have central heating. We have a electric heater that's used when necessary but quite often it isn't required at all.

THEA DIKEOS: Despite this their latest electricity bill rose from $400 to $1,100.

ROCKY CAIRNS: But I wasn't expecting $1100 dollars and that's sort of like... er, a bit of a heart stop.

It made curious as to why. I couldn't understand why.

THEA DIKEOS: By 2020 it will be mandatory for 20 per cent for Australia's energy to come from renewables.

MALCOLM ROBERTS: We'll obviously see the growth of more gas and renewable sources, but coal will still probably be the bedrock of the industry.

As I said before, it's 84 per cent of the market at the moment and in the space of ten years, that is not going to change dramatically.

THEA DIKEOS: As Federal Parliament continues to grapple with the prospect of a carbon price there's uncertainty within the energy industry and further price hikes can't be ruled out in future.

In the meantime state governments are encouraging residents to choose solar, with generous incentives such as rebates on the cost of installing solar panels.

One of those who has taken full advantage is Grenville Rose, who lives in this 1960s fibro cottage in western Sydney.

GRENVILLE ROSE: It doesn't hold heat very well so, you know, the nights can get cold in winter and days get a bit hot in summer.

THEA DIKEOS: In July he installed solar panels at a cost of $5,000. That investment has already paid dividends.

GRENVILLE ROSE: The bill we got was $13 - $13.40 all up, which was great. Love that. And prior to that our bill probably would have been $150, $160.

THEA DIKEOS: New South Wales power companies buy all the electricity generated by household solar panels. It's called a gross feed-in tariff.

It's by far the most generous of the state solar schemes as it buys the power at a higher market rate.

GRENVILLE ROSE: I'm pretty sure that over the cycle of the year we'll be self sufficient in power.

THEA DIKEOS: But the power generators say the New South Wales system is too expensive and it's being subsidised by customers without solar panels.

MALCOLM ROBERTS: People should only be paid for the energy they return to the grid, rather than all the energy they generate. And we think the Government should ensure there is some transparency in the process, so that customers, effectively, are not paying the bills for other people,

THEA DIKEOS: The New South Wales system is due to run for seven years and is currently under review.

But solar expert Richard Corkish says as solar energy becomes more affordable and efficient then rebates will be phased out

RICHARD CORKISH, UNSW, SOLAR RESEARCH: We are seeing very rapid growth now. The changes coming about as conventional electricity prices increase and as solar energy prices decrease.

And they're decreasing both by government support that's happening, particularly including here in New South Wales, and also because the manufacturing costs are coming down by technology improvement.

THEA DIKEOS: While solar panels may be the answer for some battling high electricity prices, they're not an option for pensioner Judith Chambers who lives in a public housing apartment.

With no respite from high energy prices Judith Chambers, like many other Australians, is assessing the prospects of a long hot summer ahead.

JUDITH CHAMBERS: And I won't have the fans on as long and I need- I'm a person who feels the heat. So I'll only have the fans on when it is absolutely necessary. I'll be cutting down more on what electricity I use so that I've got enough money to pay my bills.

Contact Future Sustainability today, to avoid Future Power Increases. 1300 057 132 


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