11/07/2012 - 10:48

Green energy consumers only see sunny side

11/07/2012 - 10:48

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Synergy customers opting for renewable power are being subsidised by other users.

Synergy customers opting for renewable power are being subsidised by other users.

Talkback radio is a great place to feel the pulse of the people and hear how the general public interprets the news and information they absorb.

Every time Julia Gillard’s supporters want to whinge about not communicating their message properly, they should hold back and listen to morning radio for a few hours. It is clear that no form of communication will get through to some people.

An interesting example was early last week when a Synergy customer called into a radio talkback host to say that he was planning to stop paying the Natural Power premium because the electricity retailer was charging him for the carbon tax.

The Natural Power product is an opportunity for electricity customers to voluntarily increase their power bill in order to pay for renewable power.

They can theoretically choose to receive between 25 per cent and 100 per cent of their power from renewable sources, paying a stiff premium for the privilege. 

The cost of the 100 per cent renewable energy option is, according to my calculations, less than a 25 per cent increase in a typical household power bill.

It is one of several ‘green’ power products which Synergy has sold to around 7,000 customers.

Naturally, when someone thinks they are already doing their duty as a good green citizen they would feel umbrage at having to pay the carbon tax.

That is why philanthropy is so weak in Australia. Most people feel that our relatively high per capita tax rates and a sophisticated welfare system mean they have done enough without an  additional voluntary personal contribution.

With ‘green’ electricity users, such as the Natural Power user I listened to, it is similar. They feel they have done enough already and don’t understand why they should be taxed to encourage behaviour they are already committed to.

Of course, their perception is wrong in the first place. Certainly, they are paying extra to generate green power but that is more of an offset.

If they were receiving 100 per cent renewable power they would be without electricity when the sun wasn’t shining and the wind wasn’t blowing.

Instead, they watch the TV on a still evening courtesy of Collie coal-powered electricity taken straight off the grid. Sure, they have paid for the generation of an equivalent amount of renewable electricity but that may have been produced at a time when no one wanted it or particularly needed it. 

It is ‘green-washing’ their power consumption, rather than actually altering it.

And, let’s face it, 7,000 customers is not much of a market. It is unlikely such a small number of consumers could fund the development of even one renewable power plant that was even close to being as efficient when operating at peak conditions as a traditional power source, let alone the many generators we have that are diversified across platforms – mainly wind and solar – and geographically. 

The truth is, these consumers at the vanguard of ‘green’ electricity consumption are being subsidised involuntarily by other power users through various schemes that create an impost directly via utility charges or indirectly via taxes. 

According to the typical cost estimates provided by Synergy (based on an average household with four people and medium efficiency appliances), a 100 per cent Natural Power customer would pay an extra $56.60 every 60 days or $344.32 a year, in additional to the normal cost.  

That would put a typical household bill for such a customer at around $2,000 a year. If we presume all WA’s green customers had Natural Power equivalent and they all opted out of the grid together, they would muster $14 million in revenues; not a lot to base a business on especially as that would have to include paying their share of the network cost of distributing the electricity they use. 

The reality is products like Natural Power piggyback off the existing fossil fuel system which is needed to keep the lights on night and day. 

There is no point spitting the dummy over the rising cost of that; that would be the same as any other consumer being upset about the introduction of the carbon tax – and there are already plenty of them. 

If ‘green’ electricity consumers don’t like the carbon tax, imagine how the rest of the energy-using public feels. I suggest truly committed renewable electricity users buy a windmill and cut their connection to the mains in protest … and  discover how much they need the rest of us.

Amalgamations

I have been fascinated by the battle between the state government and those recalcitrant councils which refuse to be browbeaten into submitting to Premier Colin Barnett’s election promise to consolidate the number of local governments.

As I have stated before, I can’t really fathom why this is a priority state government policy.  While there is no doubt there are some efficiencies to be gained, I can’t see votes in it. In fact, there is some evidence from states such as Queensland that a policy of council amalgamation worked against the state government. 

And there are just so many more important things to concentrate on, including efficiency within the state bureaucracy itself.

Notwithstanding the questionable reasoning behind this policy, the government has gone out to prove its complete impotence in implementing it. Normally, in politics, when a pointless policy goes nowhere, it is quietly dropped in the hope that the government’s opposition doesn’t get hold of it as ammunition for evidence of leadership failure at election time.

Not so in the case of local government amalgamations. It appears to be the policy that keeps on giving. The latest strategy that I hear about is for the state to demarcate strategic parcels of land (areas like ports or education facilities, I presume) it controls and excise them, and potentially surrounding precincts, from the area in a council’s control. 

That will increase state power over development and, presumably, reduce a councils’ rates income. A good example at a different level is Commonwealth land like the Perth airport, which has been developed at a pace and in ways that both local and neighbouring state governments could do little about.

This might be an effective tactic but only in the way bullying might work when bluster does not.

As the former Liberal member for Capel, Dr Steve Thomas, suggested in a paper he wrote in February last year, there are other ways to make councils more efficient without forcing amalgamations. One way to do that is determine what a sustainable local council is and how to measure that. 

Councils or shires that are not sustainable can be highlighted and given time to change before any ultimatum is delivered on state funding or assistance – ultimately the main power the state has. Once councils, and their voters, have something to compare with they might well seek ways to improve their performance, including the option of amalgamations where they make sense.

Or they might go down the route of Sandy Springs, which is part of the greater Atlanta area in the US state of Georgia. As reported in the New York Times in an article highlighted by the Institute of Public Affairs, this local government area has just seven employees, having outsourced everything but a core of people to ensure the contracts are being met.

That might be an extreme example but that is the beauty of a diverse system of local governments that we have. Just like our states in the federation, we ought to champion diversity and encourage experimentation so we can find the best way to do things.

Measuring and comparing how many guys in flouro are leaning on a shovel by the side of the road might be an unfair suggestion but there is no doubt there are plenty of ways councils can become more efficient; enough to keep the state government off their backs.

•mark.pownall@wabn.com.au


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