Queensland’s Minister McArdle attacks solar

Queensland energy minister Mark McArdle launched a strongly worded attack on solar and the renewable energy target in a press release yesterday.

In the press release McArdle complains that the renewable energy target adds $102 to an average electricity bill, which is contradictory to Origin Energy’s own data which is $70 for 2012, which is expected to drop to $50 for 2013. Again this inflated number is a result of faults associated with the state regulator’s price setting processes and is highly misleading. And of course he has also taken a swipe at that dastardly carbon tax (for which households will be overcompensated in tax cuts), as well as blaming the prior state government for the costs associated with the 44 cent solar feed-in tariff.

After pointing out factors solely associated with carbon reduction measures the press release then makes the interesting statement: “Mr McArdle said it was important for Queenslanders to understand what was driving up the price of electricity and why the Newman Government was looking at ways to reduce the impact of green schemes on households.”

Unfortunately he just neglected to mention the biggest factor driving electricity price rises – expenditure by state-owned electricity networks built on forecasts of peak demand growth that haven’t materialised. As our chart of the week from Solar Citizens illustrates, network costs are the biggest item by far on household electricity bills.

Electricity cost components for the typical Queensland household.

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The Queensland Liberal-National Party surged to electoral victory on a campaign heavily based around containing the cost of living. Very shortly after taking power the government implemented a freeze on Queensland electricity prices. But this then hurt the Queensland budget by reducing returns flowing from the state-owned networks. They also landed up in court with Origin Energy over retail price controls.

In the next year after the tariff freeze, the state regulator (Queensland Competition Authority) then allowed electricity prices to go much higher to make up for the lack of a price rise in the prior year. In essence the government finds itself caught between a rock and a hard place.

This has made renewable energy programs a very tempting scapegoat because the Queensland government can push the blame onto others.