electricity prices set to soar..

Australian..Mon/Aug 30,2010 [ABB]

Renewable energy targets could double the cost for
consumers.

The chief executive of one of the country's biggest
energy retailers has warned that power prices are set
to increase dramatically.

Origin Energy boss Grant King said that complying with
the mandatory renewable energy targets [RET] and network
spending would put upward pressure on energy prices.

"That's not of our making,or anybody other than policy
makers," Mr King said. "That's just the inevitable and
logical consequences of the policies" that governments
are implementing.

His comments follow 'BOTH' federal Resources and Energy
Minister Martin Ferguson and his opposition counterpart
Ian Macfarlane warning in 'separate' interviews,that
power prices were likely to double in the next five to
seven years.

Mr King said that estimate was "POSSIBLY CONSERVATIVE"
and added that many consumers of utilities faced a
real "come to Jesus" moment as suppliers were forced to
re-price ENERGY,WATER, and other essential services.

The RET seeks to ensure that 20% of Australia's energy
consumption by 2020 is derived from renewable sources.

Wind farms would cost between $100 and $125 per MW hour,
compared with $30/40 MWh for coal.Moreover,the interm-
ittent nature of wind means that it would need to be
backed up with big-ticket investment in gas turbine
power plants.

Mr King said he suspected that policymakers "DIDN'T
TRULY KNOW THE COST" of policies that had been intro-
duced.

There have been broad concerns within the energy sector
about an investment strike because of uncertainty about
climate change policy.Electric generators have already
slashed planned capital spending on power stations by
$10 BILLION over the next FIVE years.

In the absence of federal policy,state governments have
been introducing a raft of overlapping and often incon-
sistent requirements aimed at reducing greenhouse emiss-
ions. [confusion reigns supreme]

Mr King said "we have expressed a view that if people
really knew what they were doing,they would question
whether we would have been better off having an ETS and
a carbon price instead of a whole bunch of other policy
initiatives.

Soaring energy prices have been a major frustration for
energy intensive companies in mining and manufacturing.
Rio Tinto,Amcor and Xtrata Copper,has warned that firms
could be forced to reduce other costs or cut back their
operations because of higher electricity costs.

In the absence of clarity on a carbon price, "you won't
get BASELOAD BUILT,or it will be hard to tell the econ-
omics of that", Mr King said. Baseload generators are the
workhorse power stations that meet day to day needs.

He also warned that infrastructure was underpriced and
there is a real "come to Jesus" period with your water,
desalination or energy infrastructure...especially when
assets were Government owned.

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It would be more than obvious,that by 2012 Australia will
in a quagmire regarding our energy requirements.Len's
reasoning no doubt,was that by setting up a UCG plant at
Kingaroy and because of its non polluting ways..could
coexist with all forms of Agriculture.

Yesterdays Courier Mail had a picture of Gary Tessman,
one of the main antagonists in this saga,leaning against
a dead tree,torn sweater, facing a broken down fence,
stating..."food is more important than energy".

"I can't see how Kingaroy can produce both..we could lose
everything" said the dairy farmer.

Gary Tessmam knows well enough that milk processors are
paying dairy farmers barely the cost of production in
Queensland.This has been the case for a decade.Milk
processors don't want milk produced in Qld,for they can
operate out of Victoria/Tasmania for half the cost.

Mr Tessman would be aware that many of his counterparts
have been selling their properties of late to a coal
mining company in New South Wales,for up to twice
their market value and IMO,here is another hidden agenda.

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A magnet is pulling Cougar across to WA,where by 2012,we
could see a settled and progressive CXY well on its way
to achieving the recognition it deserves.I'm confident
that Cougar will reignite and finish the trials that are
important for other pipeline projects.



HM.