Feature
Tasmanian Post Ele
There were a lot of promises made in the lead up to the state election. Let’s look at what the reality is likely to be on our electricity bills.
Most businesses believe their electricity bills should be less. Our politicians agree and promise to make them decrease. Solar and battery salesmen tell us our bills will keep increasing and promise they will go down if we install these alternatives. It is difficult to feel any clarity of what to expect. In Tasmania, the government-owned Hydro make most of the power. Only three years ago they were selling power to retailers like Aurora Energy and the spot market for 5c/kWh and making a reasonable profit. Since then the Basslink cable broke, some of the big coal fired power stations closed in Victoria and South Australia has had major electricity supply issues, so we couldn’t access cheaper energy from the mainland. Today Hydro is selling power to retailers and the spot market 10c/kWh. At the same time, renewable energy surcharges (acronyms like RET, STC, LGC, LRET, SREC) that we all pay on our electricity bills have increased substantially. Today around 1.5c/kWh of our electricity bill is a renewable energy surcharge. In the next 1-3 years we will likely see the cost of electricity in Tasmania to fall by about 1c/kWh per year. Renewable energy surcharges will likely remain high during this time before falling by about 50% in 2021. There are so many large wind and solar farms in the planning or building stage that we will meet target years early and the need for subsidies will fall. The only other significant contributor to energy costs are network tariffs, the ‘poles and wires cost’, as it is commonly known. In the past this was 50% of our electricity bills but now represents only 25% - 30%, as the other components have grown this one has become proportionately smaller. The Tasmanian government has promised to reduce this further. What does all of this mean to our businesses? Apart from all the components that are beyond our control, the good news is that the way we use electricity makes a big difference to the bill. For example, if you have a bigger “off-peak” usage your costs will be a lot lower than a Monday to Friday 9-5 business. If you can load shed or reduce
April 2018 www.tha.asn.au
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