On the eve of the Federal Government Budget, a leading energy expert has warned that domestic power bills are on track to surge by up to 40 per cent.
Energy expert Danny Price said that a policy vacuum on carbon price could see retail electricity prices rise by as much as 30 per cent by June for consumers on the Eastern seaboard.
He also raised questions as to whether Australia will meet its commitments under the Paris Climate Agreement.
Mr Price is the architect of the Emissions Intensity Scheme (EIS) and said the cost of not putting an EIS in place could eventually see electricity price rises of “around 30 to 40 per cent”. He said that in the short term, he expects that retail electricity prices could rise “in the order of 20 to 30 per cent” by June.
EIS supporters include the Business Council, many big investors, the CSIRO, environmental groups and even the National Farmers Federation.
The Prime Minister refused to support an EIS last December in the face of a threat of a backbench revolt from his own party.
The energy review being conducted by Chief Scientist Alan Finkel will likely be released in June.
The review is likely to conclude that Australia is now paying the price for a lack of decisive government action in climate and energy policy.
For more than a decade now governments have been arguing about a price on carbon. The Abbott government repealed the previous Labor government’s carbon tax in 2014. Environment Minister Josh Frydenberg said an EIS would not solve the problem.
Experts and businesses say Australia is in the grip of an energy crisis
Experts and business groups agree Australia is now in the grip of an energy crisis and that the lack of a coherent climate and energy policy has hurt Australian consumers and business badly.
Australia’s electricity system is also seeing huge stress due to the changing generation mix as more renewables are brought online and old coal fired power stations close.
Electricity prices have also been affected by upgrades to poles and wires and a reliance on more expensive gas.
This is causing uncertainty right across the electricity network but particularly for consumers on the brittle fringes of the grid.
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