{"id":2382,"date":"2024-05-02T17:20:16","date_gmt":"2024-05-02T07:20:16","guid":{"rendered":"https:\/\/www.ecam.org.au\/?p=2382"},"modified":"2024-05-12T17:40:32","modified_gmt":"2024-05-12T07:40:32","slug":"future_electricity-cost","status":"publish","type":"post","link":"https:\/\/www.ecam.org.au\/index.php\/2024\/05\/02\/future_electricity-cost\/","title":{"rendered":"Why electricity will cost more in the future"},"content":{"rendered":"\t\t
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It's time to be honest: <\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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No matter what you think about the value of renewable generation versus coal or gas or nuclear or any other form of electricity generation<\/strong><\/em>, that’s not the primary reason why your electricity bills are going to be higher in the future.<\/p>\n

“Electricity bills set to rise<\/a>” runs the ABC’s headline – the regulator’s decision on network prices means retail prices will increase. The article refers to a specific AER decision affecting certain states – but similar decisions cover the rest of the states.<\/p>\n

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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tNetwork costs are the largest part of your retail bill, sometime exceeding 50% depending on where you live. As renewables reduces generations costs, the network component will only become larger.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tThe network is a natural monopoly - it is efficient to only build one set of poles and wires to deliver electricity (or pipes for gas) from where it is generated to where it is used. To avoid network companies extracting excess \"economic rents\" (profits exceeding economic costs) these services are regulated.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tNetwork revenues through the tariffs you pay are proportional to the value of stuff the network owns.\u200b<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
  • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tA corollary of building many more smaller generators is we will need more poles and wires to connect them. A larger asset base means larger revenues - one reason the network component of bills will rise.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    But that is not all of the story.\u00a0<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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    • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tJust as importantly, both the regulated value and the regulated of the network assets is adjusted for inflation. <\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
    • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tOn the one hand, this preserves the real value of networks assets.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
    • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tOn the other hand, this means that built into the largest part of your bill is a factor that means that your bill can only increase.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
    • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tDon't forget you retailer takes a clip on that network component as is goes through.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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      So really, your energy bill is going to increase even if you keep every thing else the same. So what can you do about it?<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

      \n\t\t\t\t\t
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      • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tPerhaps counter-intuitively, electrify everything. Joule for joule, electricity beats gas and petrol for the work it can do every time - so using electricity you'll get any task done for less energy and hence less money.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
      • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tDon't forget energy efficiency, insulation, blocking leaks and efficient appliances. <\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t
      • \n\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\tThink about that hallway now lit with LED lighting? Is it any less lit now than it used to be? Remember how hot incandescent or halogen bulbs were? You're not paying for that heat anymore.<\/span>\n\t\t\t\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

        It’s time to be honest: No matter what you think about the value of renewable generation versus coal or gas or nuclear or any other form of electricity generation, that’s not the primary reason why your electricity bills are going to be higher in the future. “Electricity bills set to rise” runs the ABC’s headline – […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-2382","post","type-post","status-publish","format-standard","hentry","category-green-energy"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/posts\/2382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/comments?post=2382"}],"version-history":[{"count":35,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/posts\/2382\/revisions"}],"predecessor-version":[{"id":2419,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/posts\/2382\/revisions\/2419"}],"wp:attachment":[{"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/media?parent=2382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/categories?post=2382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ecam.org.au\/index.php\/wp-json\/wp\/v2\/tags?post=2382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}