Victorian Renewable Energy Target: Power bills to spike over charges

VICTORIANS are to be slugged with five state and federal renewable energy charges, adding at least $100 to the average household’s bill and thousands more to farmers’ and other businesses’ power costs.

An irrigator, horticulturalist or chicken meat grower using 200,000 kilowatt hours a year, faces paying more than $5000 a year in renewable energy charges to subsidise wind farms, solar panel installations and feed-in tariffs.

Last week, the Andrews Government announced it would introduce legislation to establish a new Victorian Renewable Energy Target, which he said would subsidise $1.3 billion of investments in wind and solar farms.

“Renewable energy creates jobs, drives growth, and protects our environment — and most importantly, helps drive down power prices for Victorian households and businesses,” Premier Daniel Andrews said.

The premier said VRET would eventually lead to a $30 a year reduction in household electricity bills as renewable energy generation increased to 40 per cent by 2025. However he refused to release the modelling behind the forecast.

The premier also failed to mention the VRET subsidy of wind and solar farms would have to be funded by a new charge on all Victorians’ power bills.

Details released by the Government in mid-2016 show VRET would add $26 a year to the average household’s power bill, on top of the $74 they already pay to cover four existing state and federal renewable energy schemes.

Last year the Australian Energy Market Commission calculated the average Victorian household, consuming 4026 kilowatt hours of electricity each year, would pay the following “environmental” charges in 2017-18:

$26 (based on the Victorian Government’s own estimate) to fund the Victorian Renewable Energy Target, to mainly subsidise wind farm developments;

$29 to fund the Federal Government’s large-scale renewable energy target (LRET), which already subsidises wind and solar farms;

$15 to fund federal small-scale renewable energy scheme (SRES), which mainly subsidises rooftop solar panels and solar water heaters;

$20 to fund Victoria’s feed-in tariff scheme, which subsidises the price households receive for power they feed back into the grid from solar panels; and

$10 to fund the Victorian Energy Efficiency Target Scheme, which subsidises companies that install energy efficient lighting and other technologies in homes and businesses.

Australian Energy Council wholesale policy manager Duncan Mackinnon said the VRET was effectively pushing up environmental charges in Victoria by 33 per cent.

“We’re getting to the point where renewable energy should stand alone,” Mr Mackinnon said. “It’s no good just subsidising this way.”

Mr Mackinnon said Victorians would also have to pay the cost of boosting the capacity of northwest Victoria’s transmission network to connect wind farms to the grid.

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