By Stephen Bygrave. From Climate Spectator, July 22 2014.
With the amount of rhetoric flying around regarding electricity bills and energy in recent years, you’d be hard pressed to find any points of clarity amongst the noise. For the average punter with little knowledge about energy and politics, the public discussion is bewildering, however much their electricity bill may concern them.
Let's take a selection of assertions that have been made in the “expert” and partisan commentary on the energy market to illustrate some of these points:
- Everyone acknowledges that we need to use more clean energy, but the Renewable Energy Target is too high.
- The carbon price is destroying the economy and raising your electricity bill, but repealing it may not lower bills.
- Power bills went up because your neighbours installed solar, but if you install solar, your power bill will go down.
- Solar isn't reliable because the sun doesn't shine at night, yet the energy grid can't accommodate all the solar power being generated.
- Clean coal is ready to roll but nowhere to be seen. Wind turbines, which are now quite visible in a number of locations, are sadly unreliable.
- Wind turbines may make you sick, yet fires in coalmines are nothing to worry too much over.
- Gas is low emissions, clean and cheap yet gas bills have started to rise sharply.
- Fracking is needed for energy security, yet state governments have enacted moratoriums against it.
However, it's the simple truths that manage to cut through all the noise.
One simple truth is that renewable energy has led to lower wholesale electricity prices. This occurs due to a well-researched (but little reported) dynamic in energy markets known as the Merit Order Effect (see this video that explains it clearly). Perhaps the reason it hasn't caught on is because there's little or no evidence that lower wholesale prices have been passed on to consumers in the form of lower energy bills. Certainly, there has been little reporting of the effect.
We have on the other hand seen many (misleading) appeals to a supposed public good, blaming solar homeowners for everyone else's rising electricity prices.
All this hasn't stemmed the flood of homes embracing solar. There's well over a million households in Australia now generating their own solar electricity.
Now, as gas bills begin a sharp climb that could emulate the previous rise in electricity bills, those solar panels on your neighbours' house will look even more enticing.