The ability of politicians to select facts to sing their own praises beggars belief, as underlined by a new federal government release.
It proclaims: “Energy consumers are sharing in almost a billion dollars in electricity savings thanks to the Morrison government’s strong action to reduce electricity prices.”
The more politicians bend the truth the less you tend to believe them.
Just ask anyone in the electricity game the reason why wholesale prices had, until recently, collapsed.
The reasons, they will tell you, are, in no particular order, lower demand due to a mild summer and Covid, increased supply due to rooftop solar, which now stands at just under 25 per cent of all homes, lower coal and gas prices and reliable supply.
Two factors which the government can claim credit for is legislation forcing the integrated producers to pass on power wholesale prices to consumers, and the default market offer which the regulator sets to ensure standing offers are reduced.
Their policies have undoubtedly worked but it is a stretch of enormous proportions by Treasurer Josh Frydenberg and Energy Minister Angus Taylor to claim all the credit for lower retail prices without mentioning these market forces factors.
Their boast was made on the back of the latest Australian Competition and Consumer Commission report for the period to May, which noted: “Solar installation in homes and small businesses has been one of the biggest changes in the electricity sector over the last decade.”
Renewable energy is helped by government policy but it tends to keep a low profile on this and on funding for the carbon market through the Emissions Reduction Fund.
Angus Taylor doesn’t want to be seen to support a mechanism which sets a price on carbon, even though it is a voluntary scheme.
The timing of Thursday’s statement is also a stretch when the fact is that wholesale spot prices in Queensland and NSW are up around the $200 a megawatt hour mark, up from $40 at last year’s lows and $80 a couple of years ago.
The flood impact on the Yallourn power station and the fire at the Callide plant in Queensland had an impact.
The spot prices have not yet meaningfully impacted forward prices, which tend to influence retail prices
But other things being equal, if the spot price stays where it is then retail prices will increase.
Frydenberg and Taylor are unlikely to claim credit for higher prices even if - just like the falls - market forces outside their control were responsible.
More Coverage
