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Electricity Pricing - Costs due to the renewable energy target

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Costs due to the renewable energy target

 

It is interesting that all parties have steered well clear of blaming Australia’s mandatory renewable energy target (MRET) for any of the past price increases.  Learn more about the MRET here…

Yet, as previously discussed on this website, in 2011 the Independent Pricing and Regulatory Tribunal (IPART), the NSW regulator, blamed the cost of renewable energy certificates for most of that year’s increases.  

IPART  determines the maximum prices charged for regulated electricity services provided by TRUenergy (formerly EnergyAustralia) and Origin Energy (formerly Country Energy and Integral Energy) in New South Wales.

There are now two kinds of certificates under the MRET.  Both are created in response to renewable electricity generation.

Small-Scale Technology Certificates (STCs) are earned by domestic PV solar owners; at a fixed clearing house price of $40 per MWh.  There is presently an excess of STCs in the clearing house and they are being discounted by some owners by around $10.

Large scale certificates have renamed Large-scale Generation Certificates (LGCs); previously called RECs in some places on this website.  The LGC price presently fluctuates between $35 and $45 depending on time of year. 

 

image005 
source: Energy Users Association of Australia http://www.euaa.com.au/green-market-prices/


 

Energy retailers have a legal responsibility to purchase and surrender a proportion of their annual demand.  In 2012 this proportion for LGCs is 9.15%. For STCs the proportion is 23.96%  

Using the above crude numbers it can be estimated that the retailers’ average supply price is raised by around 1.2 cents per kWh; equivalent to around 60% of the carbon tax pass-through.

The actual impact on your electricity bill of these certificates is complex. There are also concessions to trade exposed industry that are factored in.

Like the carbon tax the cost to retailers of renewable energy certificates increases in future.  As the MRET target rises retailers are bound to buy a larger number of certificates and the price of LGCs is also expected to rise due to higher demand.

The MRET is a fixed energy target by 2020 not on the percentage (20%) generated by renewable energy.  The target does not fall with the projected decline in electricity demand as the price rises.

 

Annual MRET Targets 2011-2030 (GWh)*
Year

Target **
2012 16,763
2013 19,088
2014 16,950
2015 18,850
2016 21,431
2017 26,031
2018 30,631
2019 35,231
2020 41,850
2021-2023 41,000

* Targets adjusted as per Subsection 40 (1A) of the Act.
** One gigawatt hour (GWh) equals one thousand megawatt hours (MWh)
Source: http://ret.cleanenergyregulator.gov.au

 

As the table shows, the mandatory target rises fourfold between now and 2020; so that it may be as high as 30% of actual generation by then.

 

 

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Travel

Central Australia

 

 

In June 2021 Wendy and I, with our friends Craig and Sonia (see: India; Taiwan; Japan; China; and several countries in South America)  flew to Ayer's Rock where we hired a car for a short tour of Central Australia: Uluru - Alice Springs - Kings Canyon - back to Uluru. Around fifteen hundred kilometres - with side trips to the West MacDonnell Ranges; and so on.

Read more: Central Australia

Fiction, Recollections & News

The Meaning of Death

 

 

 

 

 

 

'I was recently restored to life after being dead for several hours' 

The truth of this statement depends on the changing and surprisingly imprecise meaning of the word: 'dead'. 

Until the middle of last century a medical person may well have declared me dead.  I was definitely dead by the rules of the day.  I lacked most of the essential 'vital signs' of a living person and the technology that sustained me in their absence was not yet perfected. 

I was no longer breathing; I had no heartbeat; I was limp and unconscious; and I failed to respond to stimuli, like being cut open (as in a post mortem examination) and having my heart sliced into.  Until the middle of the 20th century the next course would have been to call an undertaker; say some comforting words then dispose of my corpse: perhaps at sea if I was travelling (that might be nice); or it in a box in the ground; or by feeding my low-ash coffin into a furnace then collect the dust to deposit or scatter somewhere.

But today we set little store by a pulse or breathing as arbiters of life.  No more listening for a heartbeat or holding a feather to the nose. Now we need to know about the state of the brain and central nervous system.  According to the BMA: '{death} is generally taken to mean the irreversible loss of capacity for consciousness combined with the irreversible loss of capacity to breathe'.  In other words, returning from death depends on the potential of our brain and central nervous system to recover from whatever trauma or disease assails us.

Read more: The Meaning of Death

Opinions and Philosophy

Whither Peak Oil

 

 

The following paper was written back in 2007.  Since that time the Global Financial Crisis (GFC) struck and oil prices have not risen as projected.  But we are now hearing about peak oil again and there have been two programmes on radio and TV in the last fortnight floating the prospect of peak oil again. 

At the end of 2006 the documentary film A Crude Awakening warned that peak oil, ‘the point in time when the maximum rate of petroleum production is reached, after which the rate of production enters its terminal decline’, is at hand. 

Read more: Whither Peak Oil

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