Australia has a mountain to climb to get to cheaper energy bills, but the federal government is confident its planned transition to renewables will help bring costs down.
However, some industry leaders are unconvinced and warn wholesale prices could remain high for at least the next few years.
Despite the government’s commitment to increase renewable energy projects, Alinta Energy chief executive Jeff Dimery told The Australian he could not see how enough could be built to compensate coal-fired power stations being phased out.
Transgrid chief executive Brett Redman said while renewable projects were on track, he expected a challenge would be to build batteries and other capabilities to bring new power supply to the grid.
From July, residential customers will see price increases of 19.6 to 24.9 per cent, depending on their region, while small business customers face a rise of between 14.7 and 28.9 per cent.
In response to expected power price hikes, the government committed $3 billion towards direct energy relief in the May budget.
Eligible households include pensioners, veterans and other concession-card holders, recipients of the carer allowance and family tax benefit, and people in existing state and territory electricity concession schemes.
Treasurer Jim Chalmers said prices could have been much higher if the government had not intervened, and he was confident enough was being done to take the edge off household bills.
But he acknowledged cost-of-living pressures would be more acute for many Australians this winter.
“This is a key motivation for our energy bill relief, which was a central feature of the cost-of-living package in the budget,” Dr Chalmers told reporters in Canberra.
A pre-election promise to slash $275 off power bills by 2025 could be off the cards if coal and gas energy sources are not replaced at a faster pace.
Financial Services Minister Stephen Jones admitted the government had some work to do when it came to Australia’s clean energy transition.
“We’ve got a lot of catching up to do … it’s a big mountain to climb (and) that’s why we put so much emphasis on renewable energy, offshore wind, hydrogen, rebuilding the transmission system, all of this work has to be done,” he said.
Shadow treasurer Angus Taylor insisted inflationary pressures, including in the energy sector, had increased because of the government’s policies.
“We’ve seen warnings from energy companies that we’re going to have high energy prices for many years to come,” he told reporters in Brisbane.
“After a year in office, Labor has let inflation out of control … this is a government that must take responsibility.”
Australian Associated Press