Renewable energy projects to cost extra $97 a head EVERY...

Renewable energy projects to cost extra $97 a head



EVERY Australian will contribute $47 next year towards the cost of the federal government's policy of mandating large-scale renewable energy projects and a further $50 to fund rooftop solar panels and hot water systems, irrespective of Julia Gillard's carbon deal.

The modelling, previously secret and obtained exclusively by The Australian, shows the nation will pay almost $2.2 billion in 2012 for the federal government's scheme to ensure 20 per cent of national electricity is produced from renewable sources.

The state-based schemes that pay households feed-in tariffs to produce power from their solar panels will cost even more next year -- ranging from $4.90 a person in Victoria to $14.20 in Queensland, $12 in Western Australia and $23.30 in the Australian Capital Territory.

The National Generators Forum, which commissioned the modelling by Frontier Economics, is armed with the report as it prepares to fight any new imposts when the carbon reduction plan is outlined on Sunday.


The Greens have pressed support for renewable energy measures in the carbon deal, and electricity generators are anxious.

"The industry is concerned that the market-based solution of a carbon price may come with a raft of new regulation and complementary programs, adding to the price pressures on consumers but may deliver little abatement," forum executive director Malcolm Roberts said.

"The shift to a carbon price was once meant to eliminate the need for these ad hoc policies."

The government has split the large and small renewable projects into two markets because of a flood of solar panel installations.

The modelling shows the large-scale renewable energy target -- covering windfarms and hydroelectric schemes -- will cost more than $1bn next year, while delivering 13.1 million tonnes of carbon abatement.

By contrast, the small-scale renewable energy scheme for residential solar photovoltaic panels and hot water systems will cost $1.1bn but reduce carbon by just 1.4 million tonnes next year.

However, the costs of the small scheme fall in subsequent years as the subsidies wind down.

The modelling finds the scheme will cost almost $27 per person in 2020 as it is designed to impose a higher initial cost.

Next year, it will cost $88 for every tonne of carbon abated under the large scheme and $302 for every tonne under the small scheme -- several times the expected $20-$25 a tonne expected carbon price. The costs of the large scheme would fall if a price were put on carbon, but the report finds this is simply cost-shifting, as consumers would be paying higher electricity prices under a carbon price system.

Treasury briefings released under freedom of information laws in April urged that a review of the policies be carried out as a carbon price was introduced.

"Such complementary measures would need to be reviewed in conjunction with the introduction of a carbon price, or shortly after its introduction," the briefings said.

The schemes were also criticised by the Productivity Commission, which warned they were very expensive and made any form of carbon market less efficient.

But Resources and Energy Minister Martin Ferguson has stated the government's policy is to have the carbon tax and the renewable energy tax.

The analysis of the costs of the scheme per person included the impact on residential power bills as well as the costs to businesses and industries.