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The evidence is in – The RET should lower prices!

Despite regular commentary that the Large Scale Renewable Energy Target (LRET) is adding to the growing burden on household energy bills, recent studies have again confirmed, despite accepted wisdom, LRET should be one of the tools helping to lower household costs.

A report by Meridian and Powershop commissioned from Sinclair Knight Merz (SKM) [1] into the recent Victorian heatwave has added to the growing body of evidence that LRET is driving down wholesale energy prices.

Despite prevailing mainstream media commentary that wind “did almost nothing” during this episode of high prices, the study found that wind contributed to 6% of supply by volume in Victoria and South Australia, and as a result reduced average prices over the 7 day period by more than 40%.

This confirms an earlier report from SKM issued in June 2013 [2] which demonstrated that costs imposed on retailers by the RET are outweighed by the benefits they receive from the impact of lower wholesale costs. Consumers should see no impact on their bills from LRET and if they are, it can only be because retailers are attempting to pass through their gross costs of the scheme without accounting for the net benefits as well.

Perhaps this explains why the big three retailers’ standing rates in Victoria (which many customers pay) are as much as 32% higher than the rates offered by the three cheapest retailers who are all backed by renewable energy and, like Powershop, seem to be passing through all the benefits to customers. [3]

The debate about RET has for too long been shrouded in fiction and not fact. It’s time for some light to overwhelm the darkness in this area. We look forward to the Government’s recently announced review because we are very confident a fact based review focussed on affordability and effectiveness will lead to conclusions favouring consumers, and not large retailers.

Hear our CEO, Ben Burge speak about this issue on the RN Breakfast show, ABC Radio.

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[1] SKM, “Impact of Wind Generation on Prices,” 2014

[2] SKM, “Estimating the Impact of Renewable Energy Generation on Retail Prices,” 2013

[3] ESC, “Energy Retailers Comparative Performance Report – Pricing, 2012-2013″

2 thoughts on “The evidence is in – The RET should lower prices!

  1. Pingback: Wind Energy Reduces Electricity Prices During Heat Waves : Solar Company USA

  2. Pingback: Wind energy cut electricity prices by 40% in heatwaves : One Percent for the Planet

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