27 February 2008 – Australia’s electricity consumption is rising at double the expected rate, leading the power industry to call for up to A$100bn (US$93.9bn) to be invested in new electricity generation and efforts to cut greenhouse gas emissions.
Household energy prices, already rising steeply because of the effects of the drought on water supplies, are expected to spiral higher as a carbon trading scheme starts operating in 2010.
A new report produced for the industry, Powering Australia, warns that if the nation’s power stations are forced to employ clean coal technology, the cost of wholesale electricity could rise by half and bills for consumers by a quarter.
Powering Australia, produced with major input from the National Generators Forum, says greenhouse gas-producing fossil fuels power 93 per cent of the Australian economy, most of it created by burning black and brown coal.
If the demand for power continues at the current rate without clean technology, greenhouse gas emissions from power stations will rise by almost half by 2030, it says.
The report poses difficult questions for the federal Minister for Climate Change, Penny Wong, who this week released greenhouse gas projections, arguing that Labor’s policies would substantially reduce emissions from electricity by 2020.
The new figures rely heavily on power industry players investing in renewable energy because of Labor’s target of 20 per cent mandatory renewable energy.
The figures also rely on a substantial jump in energy efficiency. Even so, on Senator Wong’s figures Australian emissions will rise 20 per cent by 2020.
In the new climate negotiations, Europe is asking Australia to cut its emissions 20 per cent by 2020.
The National Generators Forum argues that efforts by the Government to cut emissions too quickly could incur major costs including “closure of power stations and rises in power prices”.