Carbon Price reduction could lead to higher electricity costs  

As much as one-third of Australia’s greenhouse gas emissions can be attributed to the production of electricity. With the introduction of the Australian Government’s Carbon Tax and the Renewable Energy Target (RET) it hoped to reduce the country’s emissions by 20% before the year 2020, but coming into the federal election both major parties are promising to revise the tax in an effort to ease the cost of living. A new report from Reputex however suggests that ditching the Carbon Tax may have to opposite effect increasing the cost of electricity for Australian families due to a lack of competition among energy providers.

Associate Professor of Solar Engineering at Australian National University Kylie Catchpole reports that renewable energies such as wind and solar offer zero fuel cost and can thus provide cheaper alternatives to coal and gas. Without a supporting price on carbon pollution, the RET may not be enough to encourage investment in alternatives to traditional means of electricity production. Savings made by harnessing these cheaper resources could be passed on to consumers, resulting in downward pressure on energy prices across the industry.

South Australia already produces 29% of their electricity needs from renewable energies like wind power, and the Australian Electricity Market Operator suggests that it is technically feasible to have 100% of Australia’s energy needs met by renewables if driven by federal policy and the increased efficiency of renewable power as 2020 approaches.