Solar and wind subsidies should be scrapped: ACCC

A RENEWABLE energy scheme would be scrapped and state governments forced to stop passing on the cost of generous solar and wind subsidies to all households under a radical overhaul of Australia’s broken energy market.

A RENEWABLE energy scheme would be scrapped and state governments forced to stop passing on the cost of ­generous solar and wind subsidies to all households under a radical overhaul of Australia’s broken energy market.

Households in Victoria on bad deals will save up to $750 a year on their power bills if the Turnbull Government goes ahead with every recommendation of the major review by the consumer watchdog.

The average household in the state, which is this year paying $1457, would see their annual power bills drop by $291 in three years.

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The Australian Competition and Consumer Commission review has also rejected a plan being ­considered by the Andrews Government to force power retailers to offer electricity at regulated prices, saying it should be a “last resort”.

The consumer watchdog has released its long-awaited audit of the national electricity market and called for major ­reform, including a ban on big power companies merging or buying rivals and sweeping new powers for the regulator.

The ACCC recommended the government underwrite ­investment in new “low-cost” power, but warned that trying to pick winners with particular technologies was driving up power bills.

State governments would be forced to directly fund solar feed-in-tariff schemes, instead of forcing the network — and eventually all customers — to pay up to 60c per kilowatt hour in subsidies.

Households which do not have solar are paying on average $106 a year to foot the bill for those enjoying the scheme.

The “small-scale renewable energy scheme”, which has been in place since 2010 and compensates households and businesses for purchasing solar, wind and hydro systems, should be phased out, saving non-solar customers up to $90 a year.

The review found environmental schemes were adding a total of $93 a year to household power bills in Victoria.

Victorian Energy Minister Lily D’Ambrosio didn’t rule out changing solar schemes being subsidised by non-solar customers, adding “we’ve been very clear about our priorities in terms of doing root-and-branch change of the retail market”.

Ms D’Ambrosio told the Herald Sun the proposed “basic service offer” — recommended by the government-commissioned energy market review led by former Labor deputy premier John Thwaites — was still under consideration and “we’ll be making announcements soon”.

ACCC chairman Rod Sims. Picture: AAP/David Moir

Under the plan, which was criticised by the ACCC for its potential to discourage new investment, all retailers would be made to have benchmark offer with the price set by the Essential Services Commission.

The ACCC also urged the government to ban retailers from offering discounts against their own prices which may be different from what other power companies are offering, with the Australian Energy Regulator to set a default benchmark against which discounts must be measured.

“We cannot trust the retailers to set their own default prices to consumers,” commission chair Rod Sims said.

Prime Minister Malcolm Turnbull signalled his support for the ACCC’s call for government to underwrite the construction of low-cost power generation.

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