The cheaper of the two options would be the carbon tax. Our govt: is wanting to spend 2.5 billion on direct action. Is this the way to go.

Abbott's Alan Jones script has just been destroyed

Tristan Edis
23 min ago
1

The government’s hand-picked economic modeller to evaluate the impact of the Renewable Energy Target, ACIL-Allen, has found that a wind-back of the scheme’s target would end up costing electricity consumers money, to the benefit largely of fossil fuel suppliers and generators.

This is even though the modeller was instructed by the government to attribute no monetary value whatsoever to carbon emissions.

Also, the modelling suggests that the renewable energy industry should be able to meet the current level of the target without a blowout in the cost of renewable energy certificates to the price cap.

This result is contrary to the intuition dominating the Coalition backbench but entirely consistent with the findings of several other major Australian energy market modelling analysts – including ROAM Consulting, Sinclair Knight Merz, Intelligent Energy Systems, Schneider Electric and Bloomberg New Energy Finance.

Each of these analysts have independently has come to the same conclusion that while there is an extra cost to consumers to subsidise the roughly 20 per cent of their power coming from renewables (additional to levels in 1997), this is more than offset by the extra renewables supply squeezing down prices for the remaining 80 per cent of supply coming from conventional generators.

According to ACIL Allen’s draft findings – presented yesterday to stakeholders and tweeted by Michael Mazengarb (the government has refused to publicly release the presentation) – the nationally average wholesale price of electricity generation is suppressed by around $15 per megawatt-hour as a result of the RET, relative to no scheme at all.

Household consumers consequently end up a net $232 better off by 2030 as a result of the RET, according to ACIL Allen’s draft findings.

The modeller also examined the electricity bill impact of different alternative targets for the RET over time compared to no target at all, which are detailed in the chart below.

Overall the results suggest that the higher the target the greater the savings to consumers across the period to 2030. Increasing the target such that renewables had 30 per cent share by 2030 (equates to 53,000 gigawatt-hours by 2030) works out the best for household consumers.

Freezing the target at the current level of renewable energy supply would keep costs low in the short-term but leave consumers worse off over the longer term, because it means renewables would have little suppressive impact on wholesale electricity market prices.

Annual impact on average household electricity bill of RET under different targets

Graph for Abbott's Alan Jones script has just been destroyed

Source: ACIL Allen draft findings presented to stakeholders on 23 June 2014, obtained via tweets from Michael Mazengarb

Indeed, this freeze scenario probably underestimates the cost to consumers because ACIL has assumed a cost to compensate owners of existing renewables of $40 per renewable energy certificate or LGC.

Many of these projects would have been financed on the basis of a much higher certificate value, especially given the abolition of the carbon price, and so costs to compensate would be higher.

both systems are likely to have zero affect on climate and fill the pockets of charlatons. Some people never learn. Gore, Flannery and others have already filled their pockets on junks science and dud predictions.

runner>>both systems are likely to have zero affect on climate and fill the pockets of charlatons. Some people never learn. Gore, Flannery and others have already filled their pockets on junks science and dud predictions.<<

That sums it up.....

The whole thing in my view is arse about as any impost to business simply gets passed on.

If there is to be a tax on carbon, it should be the user who pays the tax, because their immediate reaction to increased bills would be to cut their consumption, which then cuts the generation which in turn reduces emissions.

The currect carbon tax is simply a permit to pollute and as rightly stated achieve nothing in the fight against climate change.