Power bills to soar as renewable energy scheme cost triples

Ian Bushnell 7 April 2021 58
Peter Billing

Evoenergy General Manager Peter Billing explains the coming price rises. Photo: Ian Bushnell.

The falling price of wholesale electricity due to the impact of renewable generation and the ACT’s 100 per cent renewable energy scheme have collided to ironically produce an expected big hike in ACT bills from July.

Under Evoenergy’s pricing proposal for the next financial year, average residential customers face a 36 per cent rise (around $5 a week) in the network charge on their electricity bill, while average businesses will be hit with a 41 per cent rise in network charges (around $32 a week).*

Big business will face a 46 per cent rise in network charges (around $7,300 a week).

Evoenergy says it has no control over the so-called ‘jurisdictional charges’ to do with the large-scale Feed-in Tariff scheme associated with the ACT’s contracted solar and wind generators providing the Territory with 100 per cent renewable electricity.

General manager Peter Billing said that with the electricity spot price falling over the past 12 to 18 months, Evoenergy now has to make up the difference between the spot price and the higher contracted price.

“So if the spot price is lower than the contracted price, then we’re actually paying the difference between those two prices, which is on behalf of the ACT Government, and the only way that we can recover that is back through our network charges,” he said.

“This isn’t part of our business operation, it’s something that we administer on behalf of the ACT Government, and therefore any of the contract arrangements are things we have no control over.”

Mr Billing said the proposal to the Australian Energy Regulator was not an ambit claim and Evoenergy could not absorb the difference.

He said Evo understood customers’ frustration at the price increases, and it would support vulnerable users such as pensioners as much as possible.

It had flagged the possible impact of the falling spot price to the government last year.


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Minister for Energy Shane Rattenbury said the COVID-19-induced recession had also played a role in the falling spot price which had led to a more than tripling in the cost of the renewable energy scheme from around $42 million per year to $127 million this year.

“Because of our ‘contract for difference’ arrangement, where we guarantee the renewable energy generators a fixed price for the electricity they generate, this leads to an increase in the price of meeting our 100 per cent target,” he said.

“When wholesale prices are higher than this amount, we save money, and when they are lower than this price, we pay the difference between the two, which is passed through in electricity bills.”

Mr Rattenbury said the exact price increases would not be known until May when the Australian Energy Regulator assesses Evoenergy’s proposal, but he believed they would be less than the predicted $5 a week.

“The current estimate is that the cost for the typical household will increase from $1.94 per week to $5.65 per week, an increase of around $3.70 per week or $192 per year,” he said.

“This is still largely in line with the original projections of the total scheme cost, which was $5.50 per household per week.”

Mr Rattenbury said the ACT had benefited from lower electricity prices for years due to contracted renewable electricity supply being cheaper than wholesale electricity prices.

“The cost of the ACT’s Feed-in tariff scheme has been well below forecast levels for several years, which has resulted in lower household electricity costs than would have otherwise occurred, returning savings through lower electricity bills,” he said.

Mr Rattenbury said the ACT would remain comparable with other jurisdictions, even when the anticipated cost increase is taken into account.

He said assistance was available to vulnerable users, such as the utilities concession of $700 per year for pensioners.

“We will continue to work with Evoenergy to keep the cost of electricity as low as possible,” he said.


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But the Canberra Liberals have called the looming bill hikes another broken promise from the government.

“Last year, the Chief Minister and the leader of the Greens promised Canberrans that they would see cheaper electricity costs on their bills due to the ACT Government’s investment in renewable energy,” said Ms Lee.

“The Labor-Greens Government said Canberrans would see a decrease of about $43 on the annual electricity bill of the average ACT household for 2020-21. We now find out prices will rise on average $5.50 a week – almost $300 per year.

“The government needs to be upfront and tell Canberrans what they will do to keep power bills affordable.”

For those needing help, further information is available on the ACT Government’s Assistance website.

To inquire about a cheaper energy plan, go to www.energymadeeasy.gov.au.

* It was originally reported that residential bills would rise overall by 36 per cent but Evoenergy has clarified that this percentage only refers to the network charges, as does the figures for commercial customers.


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58 Responses to Power bills to soar as renewable energy scheme cost triples
rationalobserver rationalobserver 7:43 am 10 Apr 21

Isn’t this the same market dynamic as electric vehicles?
As more and more EV’s hit the road, the less revenue exists to fund the roads everyone uses.
The more and more people install solar panels at home, the less revenue there is to support the distribution network that (almost) everyone uses.
In both cases, the morally superior early adopters are distorting a market forcing changes to the underlying pricing model.

Boweavil Kat Boweavil Kat 3:30 am 10 Apr 21

Not sure how you interpret lower costs to generate energy to renewable energy cost triples. The cost of energy hasn’t tripled is has reduced. it’s the company that wants to jack up the price so they can “generate” more profit.

BlowMeDown BlowMeDown 8:35 am 09 Apr 21

Well I’ve completely misunderstood the roles of retailers and wholesalers in the electricity market. I thought the “wholesaler” owned and maintained the network infrastructure and the “retailer” supplied the electrons and negotiated the price with the generators. Instead, the “retailer” is just a front counter and billing operation and the wholesaler supplies both the wires and the electrons. There is no real competition in the market. The only way to change supplier is to physically move to another area.

Sol Sol 8:24 pm 08 Apr 21

Why is not one asking Why Evo or the government didn’t manage the risk around CFDs?

    chewy14 chewy14 9:34 pm 08 Apr 21

    Evo can’t manage the risk because it’s caused by contracts the government has forced them to implement. And you’ll notice that no one complained when we were paying lower prices when wholesale electricity prices were high.

    The question that you really need to ask is whether the government was smart in engaging in this type of arrangement and price in the first place. Demand has significantly reduced due to COVID, which has dropped prices and hard to predict but a lot of new generation supply has been put into the grid recently as well forcing the price down.

    Should the government have been better at predicting this eventuality? Hmmm.

tfx1 tfx1 12:54 pm 08 Apr 21

The responses to this article concentrate on the increase in household electricity bills, what is missing in the discussion is the impact on businesses in the ACT. The big business increase according to the article is $380,000 per year. Not sure which businesses would be impacted but could assume that it would be some large government departments. Departments are meant to run to their budgets and any compensation to them for the higher electricity prices is a tax on Australians in every other jurisdiction. Why should they pay for a vanity project in the ACT? A simple solution would be the departments are not compensated and have to live within their budget and they would probably only have to get rid of 4 staff. The remaining staff will just have to work a little bit harder to compensate for their reduced numbers.

    Capital Retro Capital Retro 5:17 pm 08 Apr 21

    Every business will be affected and if the government is looking to kick-start inflation there is no better way than to increase energy costs.

Jeff Smith Jeff Smith 9:58 am 08 Apr 21

Is anyone surprised that our Electricity prices go up when the ACT Government recently signed a 20 year deal with SolarShare to buy electricity for Canberra at 19.56 cents per kilowatt hour, when other States sign up 8 cents kwh deals and the current South Australian Wholesale electricity price is 3.5c per kwh.

    Lindsay McClure Lindsay McClure 10:41 am 08 Apr 21

    Jeff Smith. I guess you can only blame the voters. The ACT Govt was voted in by a solid Labor vote. They are getting the results of who they voted for.by giving them a clear mandate. The ACT govt is a joke. All the encumbered members could Iive in the one street. There are no 'ridings' so representation is skewed terribly. Until this changes Canberrans will not be equitably represented. Likewise the number of people who actually live in ACT but vote in NSW is amazing. Go figure!

rsm1105 rsm1105 8:38 am 08 Apr 21

Clearly renewable energy is so much cheaper.

But hey, we have electric scooters!

    Sol Sol 8:22 pm 08 Apr 21

    Read the article, closely. It is cheaper, that’s what sparked CFDs being called in. This is about mismanagement.

Katy Did Katy Did 7:34 pm 07 Apr 21

One giant con Ray

Capital Retro Capital Retro 5:13 pm 07 Apr 21

“…..private enterprise should never be allowed anywhere near essential services.”

Mark Chapman, the main players in this debacle are the ACT government and their offshoot EvoEnergy. Last time I looked they they were not a “private enterprise”.

    JC JC 7:01 pm 07 Apr 21

    That is only part true. You are right the government is an owner, but their ownership is through Icon water and is 50% of the company with Jemena owning the remaining 50%.

    The business however is run as a private enterprise.

    For more fullness Icon and AGL are equal partners in ACTEWAGL who are the retail company with Evo being the owner and operator of the gas and power networks.

    Capital Retro Capital Retro 10:02 pm 07 Apr 21

    So, who did Jemena acquire 50% from and who approved that?

    It’s sounds very shonky. I thought members of the Legislative Assembly owned the shares on behalf of ACT citizens.

    JS9 JS9 8:54 am 08 Apr 21

    Get with the times, it happened back somewhere around 2001 CR….

    Capital Retro Capital Retro 9:11 am 08 Apr 21

    And since then Jemena has been sold on to State Grid Corporation of China (60%) and Singapore Power (40%).

    Like I was saying on another thread, China will soon control all our energy supplies. Are you comfortable with that?

    JC JC 11:48 am 08 Apr 21

    Jemena didn’t acquire a share from anyone.

    Years and years ago now ACTEW and AGL created what is known as ACTEWAGL to look after power and gas in the ACT. ACTEW (Which later become Icon) obviously brought the power and AGL the gas.

    Jemena were part of AGL, but AGL was restructured into a retail arm AGL and network arm with Jemena being responsible for networks and AGL retail. Likewise ACTEWAGL was split into retail and network end result retail is 50/50 Icon/AGL and network 50/50 Ifon/Jemena.

    Capital Retro Capital Retro 3:39 pm 08 Apr 21

    JS9 has already told me it happened 20 years ago so it doesn’t matter anymore about where Jemena got the shares so but thanks for that very simple explanation anyhow.

    Getting with the times as JS9 suggested, I am still stating that Jemena is now owned by State Grid Corporation of China (60%) and Singapore Power (40%).

    Are you also comfortable about that?

    chewy14 chewy14 4:13 pm 08 Apr 21

    Capital Retro,
    Perhaps you can tell us why you aren’t comfortable with it?

    You realise that all of these companies, regardless of their ownership are heavily regulated by Australian government and independent regulators, that control how they operate right?

    Capital Retro Capital Retro 5:24 pm 08 Apr 21

    Do you honestly think China cares about the “control” the Australian government and regulators have?

    China now has control of the grid that supplies our electricity distribution so it doesn’t really matter how much electricity is going to cost us.

    chewy14 chewy14 9:46 pm 08 Apr 21

    Capital Retro,
    That comment shows a remarkable ignorance of how this market and our grid is managed.

    It doesn’t really matter what “China” wants, the owners of these businesses have little true freedom of choice and almost all of the employees involved are Australian.

    Our government will guarantee that these companies can make a good return, but you’re severely deluded if you think the Australian Government isn’t holding the reins.

    Also, you still haven’t actually outlined why you aren’t comfortable? What exactly do you think the China bogeyman is going to do?

    chewy14 chewy14 9:56 am 30 Apr 21

    LOL, you’ve been googling again hey?

    Strange though that Mr Jennings doesn’t actually say exactly how Chinese ownership might be a risk isn’t it?

    Also if you’d actually been following, ASPI have been engaging in criticism of China in numerous areas (and rightly so) for a fair while now. He’s just using this to further their position in other areas.

    But keep on googling hey, I can even help you:

    https://www.letmegooglethat.com/?q=why+is+chinese+ownerhip+bad

    JC JC 4:53 pm 08 Apr 21

    Yes and no.

    To be honest up until this point the structure of ACTEWAGL has delivered us some of the cheapest power in the whole country.

    This isn’t good that’s for sure but don’t think the owner of one partner in ACTEWAGL has any impact on this issue.

    And funnily this setup was created in the final days of the Carnell Liberal government. Goes to show how long ago it was setup.

Ol L Ol L 3:04 pm 07 Apr 21

If you vote for clowns you might as well join the circus.

JS9 JS9 2:05 pm 07 Apr 21

This is ultimately a product of the need ‘to be first’, which means we have contracts out in the market at relatively high guaranteed strike prices for contracts – while wholesale prices are low, we the ACT consumers will be paying the difference through our bills (rightly or wrongly depending on your perspective).

ChrisinTurner ChrisinTurner 1:38 pm 07 Apr 21

Once again RiotACT tries to sensationalise the headlines. Not responsible journalism.

Mark Chapman Mark Chapman 1:29 pm 07 Apr 21

This, folks, is why private enterprise should never be allowed anywhere near essential services.

Capital Retro Capital Retro 10:02 am 07 Apr 21

“Eventually gas wont be an option and the only option we will have will be electricity.so heating, cooling, cooking, hot water will have to be electricity.”

https://www.canberratimes.com.au/story/7198285/act-government-wont-connect-new-suburbs-to-gas-networks/

This was announced this morning.

Capital Retro Capital Retro 7:47 am 07 Apr 21

“Sounds like Canberra can get together with a protest we’d all agree on..”

Only if it can be spun that it is Scott Morrison’s fault.

Sean Bishop Sean Bishop 10:56 pm 06 Apr 21

Sounds like Canberra can get together with a protest we'd all agree on..

Capital Retro Capital Retro 10:09 pm 06 Apr 21

The real issue that all comments so far have ignored is that virtue signaling costs.

We now have the most expensive electricity in the world.

China continues to build coal fired generators with our steel and powered by our coal.

Anyone who can’t see that we are being taken for a ride by Ratttenbury and his followers is a China denier.

    chewy14 chewy14 7:54 am 07 Apr 21

    Where on earth have you pulled the notion that we have the most expensive electricity in the world from?

    Ken Mansell Ken Mansell 8:43 am 07 Apr 21

    Australia is the 11th most expensive (https://www.statista.com/statistics/263492/electricity-prices-in-selected-countries/). And the ACT is the most expensive in Australia and is the only jurisdiction where it is getting more expensive (https://www.canberratimes.com.au/story/7063382/electricity-prices-to-fall-everywhere-in-australia-except-the-act/)

    Capital Retro Capital Retro 9:56 am 07 Apr 21

    That’s interesting because virtue signaling Germany, a “leader” in renewables, has the most expensive electricity and Poland, still using reliable coal, is half the price of Germany.

    They way things are going, a lot of Australians will die from lack of affordable heating in coming years but they will all feel good about it because they are somehow saving the planet.

    chewy14 chewy14 5:00 pm 07 Apr 21

    Ken,
    There is a difference between the price of electricity and how much your electricity bill is because the bill is determined by the actual amount you are using.

    Take a look at the actual electricity prices in each state per kWhr and the ACT isn’t the highest.

    Capital Retro Capital Retro 9:49 am 07 Apr 21

    It’s the most expensive in Australia and because we can’t go anywhere else in the world anymore that means the world too.

    JS9 JS9 2:04 pm 07 Apr 21

    Absolutely quality logic in play there CR…. even by your lofty standards….

    chewy14 chewy14 9:10 am 08 Apr 21

    JS9,
    I hadn’t actually read Capital Retro’ s reply, that is a doozy.

    Although seeing as we don’t have the most expensive electricity in Australia, he’s still wrong anyway.

    What we do have is a relatively rich population who use significantly more electricity than other places in Australia, which leads to higher bills, despite pur electricity actually being cheaper per unit.

    Capital Retro Capital Retro 10:12 am 08 Apr 21

    Still waiting for your critical analysis on why China is still building coal fired power generators, JS9.

    JS9 JS9 3:06 pm 08 Apr 21

    My response was to this CR:
    “It’s the most expensive in Australia and because we can’t go anywhere else in the world anymore that means the world too.” Not your original ramblings…..

    On your broader point about China, they are a sovereign country that can do what they want at the end of the day. The main factor you are conveniently forgetting is that Australia and China are at completely diffferent points in the development phase. China still barely has capacity to meet its ever growing demand – noting it is also investing huge sums into renewable technology. We do meet our demand and have a mature electricity market – much easier to transition in the second case than the first.

    JS9 JS9 3:07 pm 08 Apr 21

    Absolutely spot on chewy. At a per unit level, even with this increase (which in reality is the result of a poor methodology for recovering costs implemented by the ACT Government, more than anything else), we will still be very favourably compared.

    Capital Retro Capital Retro 4:45 pm 07 Apr 21

    It’s nearly on equal quality with Rattenbury’s claim that we get 100% renewable electricity in the ACT.

Dan Myles Dan Myles 10:00 pm 06 Apr 21

Nationalise all essential services then, get rid of privatisation it's a scam.

Tom Adam Tom Adam 8:52 pm 06 Apr 21

Not surprised, we pay pay pay under this government. And not for better outcomes.

    Justin Watson Justin Watson 10:17 pm 06 Apr 21

    Tom Adam Really, cause theres not too many other cities in Australia I'd rather live in. I mean whinge all you like, but you are benefitting from low unemployment and high average wages here in Canberra. That usually means we have to pay a bit more, but overall we are so much better off than most places in the world. I mean highest disposable income in Australia also means after we've paid all the nasty bills we still have more money left over than everyone else.

Lyndsay Ian Lyndsay Ian 7:53 pm 06 Apr 21

So the Act Govt is pushing us to take on more and more high usage electrical appliances because it is now a renewable resource, ie wind, solar, hydro.

Eventually gas wont be an option and the only option we will have will be electricity.so heating, cooling, cooking, hot water will have to be electricity.

Take a guess whats gonna happen, prices will skyrocket because the electricity companies will have us by the balls.

They are already talking about charging a tax for those who already have solar, so now they want to penalise people for contributing to produce their own electricity.

Seriously , it is rigged.

Only option is go solar, get batteries and go off the grid.

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