The Energy Efficiency Council (EEC) has called on Australia's energy ministers who are meeting in Canberra tomorrow to lower power bills for business.
The Council of Australian Government (COAG) meeting tomorrow will examine a range of issues surrounding electricity generation.
EEC CEO, Luke Menzel, said power costs can be reduced by fixing Australia’s energy markets and driving sensible, cost effective energy efficiency.
“Energy bills in Australia have risen dramatically over the last decade. The sad fact is that poor regulation, excessive spending on poles and wires and a lack of focus on energy efficiency have short-changed users around the country,” Menzel said.
Recent electricity price spikes have started a major national debate on how to reform Australia's electricity system.
Australia’s energy ministers are meeting in Canberra tomorrow August 19 and the new Federal Minister for Environment and Energy, Josh Frydenberg, has put electricity reform at the top of the agenda.
“Electricity price spikes in South Australia have outraged many energy users, but this is just the tip of the iceberg. Electricity network companies have spent billions on infrastructure that could have been avoided if we’d properly managed demand, and consumers are picking up the tab,” Menzel said.
"The cheapest way to meet Australia’s energy needs is to balance investment in energy supply with smarter energy use. The simplest example is keeping an off-grid house cool in the summer. If the homeowner doesn’t invest in an efficient air conditioner, they’ll have to pay more for the equipment that supplies them with energy (a larger and more expensive generator).
"However, Australia's electricity systems don't follow this basic principal. Instead, there are biases in our electricity systems that drive over-investment in energy supply and under-investment in managing demand."
In 2002, former Energy Minister, Warwick Parer, led a review that concluded that the National Energy Market (NEM) has a supply-side bias that raises energy bills. Since then a raft of reviews have found major problems with Australia's energy market including a Productivity Commission review in 2013 and two separate Senate Committee inquiries in 2012 and 2014.
However despite the long list of reviews, the problems remain. Last month the EEC released a comprehensive plan on how to keep energy affordable, the Australian Energy Efficiency Policy Handbook recommended:
Ensuring that electricity tariffs are fair and encourage smart investment
Overhauling the way that electricity networks are regulated
Improving standards for appliances, buildings and vehicles and
Saving energy in homes, businesses and public buildings.
“With a wave of new investment in renewable energy and storage on the horizon, it’s essential that we fix the flaws in our energy system,” Menzel said. “If we just focus on addressing issues with our energy supply, we’ll only be tackling half the problem and bills will continue to rise.”
Recognising the importance of energy efficiency, Frydenberg set a target last year to improve Australia’s energy productivity by 40 per cent by 2030 and signed a new National Energy Productivity Plan.
Commenting on tomorrow's meeting, Frydenberg said the whole energy market is very much in transition.
"Coal is around 60 per cent of the electricity generation today. That has come down substantially since 2004 when it was above 75 per cent and it will continue to go down," he said.
"This transition has to be done while still ensuring the reliability and affordability of our energy supply is maintained throughout this process."
The handbook is available at www.eec.org.au/handbook