Green Energy
By Ross Kelly
Published Dow Jones Newswires
SYDNEY -(Dow Jones)- Australia's carbon tax won't have a significant impact on the country's household electricity prices, which will remain competitive with those in other developed countries, the head of Australia's biggest energy retailer, Origin Energy Ltd. (ORG.AU), said Thursday.
In a speech at a business lunch in Sydney, Chief Executive Grant King said Australians typically pay about A$1,200 a year for electricity. About 54% of that comprises network costs, which have been increasing significantly over the last few years.
Wholesale costs account for 36% and retail costs for the remaining 10%.
"We expect that increased network costs that have driven increases to date have peaked and will moderate over the next few years," King said.
Wholesale costs are expected to be pushed up by the price of coal and gas increasingly reflecting export parity pricing, Australia's mandatory renewable energy targets, and the proposed carbon price.
While the proposed carbon price of A$23 per metric ton could result in a 50% increase in wholesale electricity and gas prices over the next 3-5 years, these costs comprise a relatively small percentage of bills, King said.
"We agree with government estimates that a carbon price of A$23/ton will lead to a 10% increase in the retail cost of electricity or about A$2.30 per week," King said.
"One should bear in mind that over the 5 years or so in which these effects will occur, household incomes are expected to rise on average by 4% a year, or simplistically 20% over a five year period. On this basis we think it unlikely that the cost of household energy will become significantly more burdensome on consumers."
Australia's proposed carbon pricing scheme was passed this month by the House of Representatives, assuring an easy passage into law. After 3 years the tax will transition into a carbon emissions trading scheme.
Copyright © 2011 Dow Jones Newswires
Read more: http://www.foxbusiness.com/industries/2011/10/20/australian-carbon-tax-not-too-burdensome-on-energy-bills-origin-ceo/#ixzz1dI2A8lYB
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Green Energy
Australian Carbon Tax Not Too Burdensome On Energy Bills - Origin CEO
By Ross Kelly
Published Dow Jones Newswires
SYDNEY -(Dow Jones)- Australia's carbon tax won't have a significant impact on the country's household electricity prices, which will remain competitive with those in other developed countries, the head of Australia's biggest energy retailer, Origin Energy Ltd. (ORG.AU), said Thursday.
In a speech at a business lunch in Sydney, Chief Executive Grant King said Australians typically pay about A$1,200 a year for electricity. About 54% of that comprises network costs, which have been increasing significantly over the last few years.
Wholesale costs account for 36% and retail costs for the remaining 10%.
"We expect that increased network costs that have driven increases to date have peaked and will moderate over the next few years," King said.
Wholesale costs are expected to be pushed up by the price of coal and gas increasingly reflecting export parity pricing, Australia's mandatory renewable energy targets, and the proposed carbon price.
While the proposed carbon price of A$23 per metric ton could result in a 50% increase in wholesale electricity and gas prices over the next 3-5 years, these costs comprise a relatively small percentage of bills, King said.
"We agree with government estimates that a carbon price of A$23/ton will lead to a 10% increase in the retail cost of electricity or about A$2.30 per week," King said.
"One should bear in mind that over the 5 years or so in which these effects will occur, household incomes are expected to rise on average by 4% a year, or simplistically 20% over a five year period. On this basis we think it unlikely that the cost of household energy will become significantly more burdensome on consumers."
Australia's proposed carbon pricing scheme was passed this month by the House of Representatives, assuring an easy passage into law. After 3 years the tax will transition into a carbon emissions trading scheme.
Copyright © 2011 Dow Jones Newswires
Read more: http://www.foxbusiness.com/industries/2011/10/20/australian-carbon-tax-not-too-burdensome-on-energy-bills-origin-ceo/#ixzz1dI2A8lYB
- Energy Market Reforms Argued
The Clean Energy Council (CEC) has argued that energy market reform is crucial to keeping power prices down. In its submission to the Senate Select Committee on Electricity Prices, the CEC has argued that rules that underpin how the electricity industry...
- Power Pricing Surge
Charges 70 per cent higher than the American average A figure that will grow to 160 per cent in two years Exposes myth that Australian electricity is relatively cheap AUSTRALIANS pay 130 per cent more for electricity than Canadians, according to new...
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- Bnef: Pv Will Be Cheaper Than Fossil Fuels In Australia By 2020
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