Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 1997 Week 11 Hansard (6 November) . . Page.. 3741 ..

MS TUCKER (3.43): The Greens are very concerned about the impacts of competition in electricity. We live at a time when there is increasing preoccupation with commercial objectives and market principles. I believe that we need to be very careful in assessing where this obsession will take us. Where will we be in 20 years' time in terms of social and environmental outcomes? Who will benefit? Who will be the losers? Who is driving the reform process?

The main goal of the restructuring is an attempt to create a more competitive market for electricity, with the overall aim of reducing electricity prices. The environmental arguments that are used in favour of the national electricity market are that competition will provide greater opportunities for alternative energy suppliers. Unfortunately, the rhetoric does not match the reality to date. Cogeneration was meant to be one of the big winners; but, according to them, they are not able to get into the market the way the reforms have been proceeding to date. The main problem is that price is still driving the supply of energy and there are no inbuilt mechanisms to promote energy efficiency rather than consumption of energy.

A major problem with this focus on the bottom line price is that the external costs of electricity supply - all the social and environmental costs that cannot be quantified in our traditional accounting systems - are not factored into the prices. So, we see the situation where electricity from brown coal - the most greenhouse gas emitting electricity technology - has one of the lowest prices and subsequently gets priority for feeding into the national grid. Clean technologies, like solar power, which have lower environmental costs, will not get priority in the grid, because they have a higher dollar price. The whole market is thus distorted away from the use of non-polluting energy sources.

This is why such economic measures as a carbon tax have been called for by various bodies, as such a tax would internalise these environmental costs into the price of electricity and thus remove some of the distortions in electricity pricing. If governments were really serious about setting up an open market for electricity, they should really make sure that the market works as effectively as possible by including environmental costs in this market. But, of course, the Federal Government does not want to do anything about the greenhouse issue, apart from defending the dinosaur coal industry in Australia.

Without tough environmental regulations in place, the competitive market for electricity contains barriers to the wider implementation of efficient energy use and renewable energy which are additional to those in a highly regulated market. The hedging contract entered into between Yallourn Energy and ACTEW is a case in point. That arrangement was entered into precisely because both Yallourn Energy and ACTEW benefit from the arrangement. Long-term price stability is the key. Greater certainty for the prices of energy going into the pool is ensuring that old technology has an ongoing market.

The other consequence we are seeing from these reforms is utility break-ups and privatisation all over the country. This is all happening with virtually no regulatory framework in place to oversee the delivery of essential services and the monitoring of social and environmental outcomes. Utility break-ups and privatisation result in considerable losses in the integration, quality and range of environmental services. There are also serious social justice concerns.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .