From the Treasury modelling of the carbon tax.
The carbon price leads to an average increase in household electricity prices of 10 per cent over the first five years of the scheme. This is a modest increase in the context of the 40 per cent real increase in electricity prices over the past 5 years.
Sounds trivial – well, not really, but let’s give them the benefit of the doubt. So what is happening on the ground? In South Australia it looks like prices will rise by 10 per cent in the very first year!
Other retailers will also pass on the carbon tax burden to householders, with Origin Energy saying yesterday it was still “crunching the numbers” but estimated a 10 per cent hike to its customers’ annual electricity bills from July 1.
(HT: Andrew Bolt)
Update: Phil draws our attention to a discrepancy in the information Treasury has released. In the main document we read
The carbon price leads to an average increase in household electricity prices of 10 per cent over the first five years of the scheme.
Compare that to this
Carbon pricing is expected to add around 10 per cent to electricity prices in 2012‑13 and 9 per cent to gas prices.
It is not just SA. Victorians are getting price rises of 10% in July. Check your supplier.
Big Al of Melbourne
22 Feb 12 at 10:02 am
The MRET is surely to blame for part of this price surge. I thought it might be the silent destroyer given the information presented suggests that the CT will be smaller in dollar terms than the initial implimentation of the GST.
On the electricity market right now, renewable energy is cleared from the market first, and with a garuantee from the government for 100% of it to be sold. As South Australia pays for more and more wind power, the costs are pased on by the retailers.
Given our Gas/Wind mix in SA, I worked out the impact on our residential power bills from the CT should be less than half (don’t quote me on that) of that in the eastern states. For businesses who use the interconnector from a Victorian brown coal station in summer it’s a different story.
sean
22 Feb 12 at 10:04 am
sean – from the story it looks like MRET could be an additional charge.
Sinclair Davidson
22 Feb 12 at 10:07 am
Be sure to get a true figure for the cost of subsidies for renewable power sources and think about a share of the 10B for research on more of the same.
Rafe
22 Feb 12 at 11:34 am
For ten billion we could build ten nuke reactors and cut energy emissions by 1/3. They would also supply a lot more dependable baseload.
.
22 Feb 12 at 11:42 am
Nuke reactor costs $25bil for one contributing to base load.
pete m
22 Feb 12 at 1:14 pm
Lol, where did you get those figures from?
GE have an off the shelf Gen 3 for sale and it’s around a billion (USD I think). Coal power stations already use cooling water so you could build a nuclear reactor nearby and reduce transmission infrastructure costs. So now all we need is $22-4 billion to be accounted for…
sean
22 Feb 12 at 1:59 pm
WTF LOL Hamburger?
.
22 Feb 12 at 2:01 pm
[...] Sinclair Davidson notes that a 10 per cent rise in power bills in just the first year is not what Treasury predicted at all. Last year it said we’d get this rise in not one year, but five: The carbon price leads to [...]
CO2 Tax Australia – Combet Bets The Economy On A Deal That’s On The Never-Never « PA Pundits – International
22 Feb 12 at 4:02 pm
I think he meant one billion for the reactor and $24 billion in EIS and other regulatory requirements.
Entropy
22 Feb 12 at 4:04 pm
Actually a 10% rise in the first year is exactly what was predicted.
“Carbon pricing is expected to add around 10 per cent to electricity prices in 2012‑13 and 9 per cent to gas prices.”
Phil
22 Feb 12 at 4:32 pm
Yeah, sure, electricity prices are going to rise much more than this lying government has said; but, how about no electricity? What price do you factor in for that? Earth hour for a day or 2 at a time.
cohenite
22 Feb 12 at 7:35 pm
“Update: Phil draws our attention to a discrepancy in the information Treasury has released. In the main document we read”
It’s not a discrepancy, just a misreading; the single 10% jump applies to the entire first five years. There is not epected to be any further (signifigant) jump because the price increases only marginally each year.
Phil
22 Feb 12 at 7:44 pm
Phil – maybe Treasury meant to say 10 per cent in the first year but that isn’t what they wrote. There is a huge difference between 10 per cent over five years and ten per cent in the first year.
Sinclair Davidson
22 Feb 12 at 7:49 pm