If the Government is looking for an excuse to ditch the Clean Energy Target, it will struggle to find one in the preliminary report of the competition watchdog's electricity pricing inquiry.

And if you hear anyone saying the Australian Competition and Consumer Competition (ACCC) report provides backing for such a move, don't buy it — it's spin.

The ACCC has, in fact, given the lie to the widespread misconception that incentives for renewable energy are the main reason Australians are paying far more for electricity than they used to.

Retail prices have risen by almost two-thirds over the course of a decade, but the report confirms that subsidies for renewables have made a very minor contribution to that huge rise.

Network costs — the infrastructure for retail electricity supply — account for almost half the price rises (48 per cent).

Wholesale electricity costs are responsible for 22 per cent of these price increases.

Environmental schemes add just 7 per cent.

That figure includes the cost of very generous incentives in some states to encourage the take-up of roof-top solar, which have since been phased out.

The cost impact of the existing Renewable Energy Target has also been offset because deployment of large-scale renewable energy has helped to push down wholesale prices in recent years.

The report confirms that the main cause of the surging prices has been so-called "gold plating" of the electricity supply network — partly the result of a flawed regulations that encouraged network companies to overestimate power demand because they made money by putting in place more capacity.

Considering the recent hysteria about potential blackouts, it's worth noting that the ACCC is critical of state governments, especially the NSW and Queensland governments, for putting in place unnecessarily high reliability standards that pushed up the price of electricity for consumers.

The failure of privatisation

The mandarins at the ACCC are the High Priests of competition policy.

Yet their report shows that the promise of privatisation — lower prices and consumer benefits from greater competition — has failed to materialise.

Instead, a highly concentrated market with three big energy companies is identified by the ACCC as one of the key problems.

The ACCC used its powers to compel energy companies to supply it with information, allowing it to determine the margins they're making on retail electricity supply.

It's a pretty healthy clip — between 5 and 10 per cent (averaging about 8 per cent) — which is a lot more than a regulated monopoly supplier would be permitted to make.

The ACCC report suggests there is room for tougher regulation to stop price gouging, encourage competition, and provide clearer information to consumers so they can navigate the market and get the best deal.

Dealing with reliability of supply

The competition watchdog also lends support to the idea that there is a better way to ensure reliability of supply than overinvesting in expensive capacity to deal with a few hot days a year.

For example, measures such as demand management technologies which provide incentives for consumers to turn off their air conditioners for a while during peak demand.

However, as the ACCC noted, consumers would need to be aware of the risks involved, including "including complex contracts and exposure to variable pricing".

But killing the Clean Energy Target? There's nothing in the ACCC report that suggests this.

ACCC chairman Rod Sims ( Supplied: ACCC )

There was a passing comment from ACCC chairman Rod Sims that he does not necessarily accept the view of Australia's chief scientist Dr Alan Finkel that a Clean Energy Target will cut energy prices by 10 per cent by providing incentives for timely investment in new supply.

Mr Sims thinks the price impact may less significant.

But twisting this into a case against the Clean Energy Target — there's more spin in that than the blades of a wind turbine.

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