The Federal Government's proposal to subsidise traditional electricity generators through a new charge on household electricity bills is a blatant attempt to delay the switch to clean energy according to the Nature Conservation Council of NSW.
Leaked advice from the Energy Security Board to all energy ministers on Tuesday night recommended Federal Energy Minister Angus Taylor's preferred “capacity market” despite near unanimous objection from industry, consumer advocates and environmental organisations during consultation. [1]
“This is a big new tax on everyone's electricity bills from the Morrison Government,” said Nature Conservation Council Deputy Chief Executive Jacqui Mumford.
“This proposal would delay clean energy investment by funnelling consumer money to existing coal and gas generators.
“Angus Taylor must come clean on how much this new tax will add to household electricity bills.
"Australia needs to phase out coal in the next nine years to reach its Paris commitments.
“Paying coal generators to stay open will just mean Australia falls further behind on climate goals, leading to worse bushfires and more extreme heatwaves.”
Capacity markets are inefficient because they pay existing generators to sit idle. A 2019 review of the Western Australia capacity market found it cost WA electricity consumers $116 million a year and added $105 annually to the average household electricity bill. [2]
References
[1] Renewables industry blasts ‘unacceptable’ Australian energy market rules it says will prolong coal plants, The Guardian, 28 July, 2021.
[2] Improving Reserve Capacity Market Signals, WA Treasury, February 2019
[3] Big win for coal generators as ESB pushes for Taylor’s favoured capacity markets, Renew Economy, 28 July, 2021