Ten years ago, the ACT Government’s renewable energy contracts were “highly contentious”, Chief Minister Andrew Barr said, but a decade later, they have proved their worth, shielding the ACT from the electricity price hikes the rest of Australia is experiencing.
Energy prices across the country have more than doubled, as the ABC reported recently, but the ACT is the only jurisdiction where electricity prices (regulated standing offer tariffs) will decline, the Independent Competition and Regulatory Commission (ICRC) stated this week. In fact, the ACT will have the lowest standing offers in the National Electricity Market, lower than NSW, Victoria, Queensland, or South Australia.
ActewAGL’s electricity prices will decrease by 1.25 per cent on average in the 2022–23 financial year, saving households $23 and businesses $88, the Independent Competition and Regulatory Commission (ICRC) predicted this week.
That was because of a decline in scheme costs of 20.07 per cent due to a fall in the ACT Government’s large-scale feed-in tariffs. This decline more than offset a 13.65 per cent increase in wholesale energy costs, due to higher coal and gas prices, the ICRC said.
In contrast, Mr Barr said, NSW, Victoria and South Australia would see double digit price increases, and households and businesses’ bills would increase by “hundreds if not thousands of dollars”. In NSW, for instance, an average household will pay $2,625 – around $818 more than an equivalent ACT household ($1,807).
“The ACT is well placed to ride out this challenging period in the National Energy Market,” Mr Barr said.
The ACT’s low standing offer was “a feature of our effective hedging against future price increases by the long-term renewable supply contracts that we’ve been progressively entering into over the last 10 years” (for instance, as the ABC reported, with the Royalla solar farm or the Hornsdale wind farms).
They achieved a dual objective: 100 per cent renewable electricity at fixed prices. “This means that in situations like the nation is facing at the moment, when market spot prices are surging, when we are seeing a significant upward pressure on energy prices across the nation, the ACT is very well insulated from those price increases.”
That relative pricing stability, Mr Barr said, “should give Canberrans confidence that not only was this the right decision to take way back in 2012, but it is paying big dividends now”.
Mr Barr did not think fixed prices would increase. “The cost of renewable energy generation will be low into the future. The upfront infrastructure is where the major expense is, but the sun, all things being equal, will continue to shine, and the wind will continue to blow – and that doesn’t cost anything… It’s been clear for a while that renewables are the cheapest form of energy.”
Mr Barr and Shane Rattenbury, ACT Minister for Water, Energy and Emissions Reduction, encouraged Canberrans to take up government programs such as the Sustainable Household Scheme, a $150 million program that helps low- and middle-income Canberra households switch from gas to electric appliances.
So far, Mr Barr said, 30,000 Canberra homes have rooftop solar, while large- and small-scale community-level and industry-led solar projects in the ACT were blossoming.
“We’re generating more of our own power than we ever have before. As each day goes by, we’re generating more and more. That’s keeping prices at the sorts of levels that we’ve seen.”
The future, Mr Barr predicted, was electric; the ACT would need more electricity for the transition from gas and petrol to electric power and vehicles. It would achieve this through the Big Canberra Battery, a distributed network of batteries, with financial backing from the new Labor federal government.
