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Category: Electricity Energy and Utilities / Environment / Population and Demographics

Home power bills up 61 per cent despite improved efficiency

Wednesday, 10 Feb 2016 03:18:58 | Sara Phillips

Investors look at computer screens at a brokerage house in Shanghai yesterday. The Shanghai Composite Index fell 2.52 percent to 3,080.42 points. — Reuters

Household energy prices have increased 61 per cent between 2008 and 2014 despite an overall drop in home energy use, new information from the Australian Bureau of Statistics has shown.

Key points:

  • Since 2002 energy use per household has decreased by 7 per cent
  • Biggest impact on bills came from companies spending on infrastructure, energy analyst says
  • Poles and wires costs can make up 40 per cent of household bills, Energy Users Association of Australia says

Since 2002, energy use per household has decreased by 7 per cent.

That figure includes the energy generated by home solar panels, showing an overall picture of energy efficiency.

"What we've been doing in the last few years is seeing the fruits of a number of government efforts that stretch back over a decade to enhance the energy efficiency of our homes and of the appliances we use," Green Markets energy analyst Tristan Edis explained.

External Link: Annual household energy costs are up 61pc since 2008

"We're becoming more efficient with energy certainly at a household level.

"It's not necessarily the same in mining, for example.

"But, unfortunately we've got to do a much better effort of regulating the monopoly power companies have so we don't end up paying more for our electricity than what we need to."

Mr Edis said environmental initiatives such as the renewable energy target and the now-scrapped carbon tax raised bills slightly, but the biggest impact came from companies spending big on infrastructure they did not need.

"The regulators took their eye off the ball starting in 2007 and let the electricity poles and wires companies — the electricity networks — go through a spending binge that turned out to be completely unnecessary," Mr Edis said.

'Drop in energy usage not reflected in prices'

Energy Users Association of Australia chief executive Phil Barresi agreed that poles and wires had hit electricity costs hard.

"With large energy users, that can make up between 55 to 60 per cent of a power bill. With households it can be anywhere up to 40 per cent," he said.

"In the last few years we've seen the exiting of a quite a few large energy intensive manufacturers and there will be more of that in the next few years.

"We've seen energy efficiency programs rolled out by various states, so these have all impacted on energy consumption, but it hasn't been reflected in a drop in prices."

John Bradley, chief executive of the Energy Networks Association, whose members are responsible for the pole and wires said: "While network costs had increased over the last few years, they've stabilised last year and now are trending downwards."

Mr Edis said the economy continued to perform strongly in the period, showing the price of electricity is not the drag on the economy some would suggest.

"This was an overblown debate about the cost [of electricity] when in fact these are not the main drivers of cost in the economy," he said.

"They are in fact a small proportion of industry costs and household costs.

"It's been an absolute disgrace of our policy discussion that so much effort has gone into this issue when there are other things that are far more important."

AustraliaPlus


 

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