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With so many questions submitted in advance and throughout the Zoom, we could not get through them all.
However, my key take aways from Monday’s discussion are below.
If your question was not answered and you’d like to follow up, please get in touch by emailing me.
My take-aways:
1. There’s no avoiding the cost of new investment. Ageing coal assets need to be replaced with new generation and whatever form that takes will have costs and risks
2. Our electricity costs are largely dictated majorly by wholesale costs (~40%) and network costs (~40%)
- High gas and coal prices, coal outages and lack of competition have driven increases in wholesale prices
- Replacement of aging assets, new connections, inefficiencies and supernormal profits have driven increases in network costs
- Of these network costs, distribution (local connections to households and streetlights) makes up four fifths, while transmission (long distance high voltage poles and wires) costs make up one fifth (~8%)
3. Gas only generates about 3% of total electricity in NSW, but is often the "marginal producer" (and, therefore, price setter) in electricity markets
- Gas averages $200/MWh, renewables average negative $30/MWh - the more renewables in the market, the lower the wholesale electricity price
- Although gas production has doubled and east coast consumption has reduced by a third, gas prices have tripled because that price is set by international markets
4. Gas will continue to be an important input to industry until new technologies are developed
- While there are lots of opportunities to reduce or eliminate gas use (while saving money) in the residential and electricity sector - some industries will continue to use gas as a feedstock and for high heat
- High gas costs have been attributed to manufacturing job losses. In the near term, competitive gas prices are needed for the viability of these hard to abate sectors, while in the long run, their transition could have large economic opportunities for Australia (for instance, in green steel)
5. Households can lower their energy bills by ‘electrifying’
- Shifting to efficient appliances, installing solar and a battery can decrease your net electricity bills by two-thirds even after accounting for upfront costs
- Check out energy.gov.au for information about rebates and how to electrify your home
- Check out SunSPOT to get an estimate on your personal savings and map your roof
- Move as much energy consumption as you can to the middle of the day (but check your tariff first)
- Look out for the Solar Sharer program - coming next year
How I’ll keep working on this issue
- Continue to counter mis and disinformation by arming the community with facts
- Continue to advocate for actions that speed up the rollout of renewables and support household energy resources
- Advocate to fix the broken gas market to decouple domestic prices from international prices
Want to know more? Yesterday Amandine and the team at IEEFA have released a report Improving energy affordability aligns with net zero. It's worth a read!
If you have feedback or questions, please get in touch by emailing me on [email protected].
Allegra
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