More choice means greater efficiency

THE state's largest electricity retailer is strongly advocating the introduction of advanced metering, in-home displays and critical peak pricing so customers are provided with immediate price signals to modify their behaviour and energy use habits.

Synergy chief executive Jim Mitchell said providing customers with a visible in-home price signal would allow them to choose what time to use power according to price, and would encourage greater energy efficiency.

"Advanced meters is two-way communication to let you know the electricity you are consuming now is really expensive or really cheap...advanced meters means we get ability to charge you what it actually costs to produce," Mr Mitchell told the WA Business News forum.

"We're seeking to provide customers with the ability to get a visible sign in this area. As soon as you get a visible signal you can change people's behaviour.

"We've been worse than pathetic at educating customers about the way the industry actually works. So we initiate things like Beat the Peak [campaign].

"In WA, approximately 15 per cent of your entire electricity costs is there because of the daily air-conditioning needs of WA households for 60 hours a year. Monday to Friday, 3 o'clock to 6 o'clock on the five hottest summer weeks.

"So we are paying a premium for 60 hours a year. It's the same as building a 15-lane freeway to get out of the city; no-one expects you to do that because it costs so much."

The electricity sector is also pushing cost-reflective tariffs.

Mr Mitchell said the government's current electricity tariff review did not factor in costs associated with climate change.

"We've had 18 years of no price increase, so we've got wrong signal there. It should have gone up consistently. Now it's coming home to roost," he said.

Verve Energy managing director Shirley In't Veld agreed that having the right price signal would drive greater energy efficiency.

"A lot of what drives efficiency is having the right price signal, which is seriously lacking in WA. This is an area where WA is probably more exposed than other states because we've had a price freeze for so long," Ms In't Veld said.

"It's not just the tariff freeze, we know they've got to go up by at least 80 per cent. But then you've got the increasing cost of fuel with gas prices going up and other prices going up, then also the carbon being factored in.

"WA is especially exposed, but it's largely of our own making in that we just haven't sent the right price signal."

Mr Mitchell added that increased renewables would be a significant cost for business.

"Unfortunately [renewables] cost a significant amount of money," he said.

"With renewable generation there's the obvious [cost], which is the wind farm or the biomass farm, then there's the not-so-obvious cost, which is the backup open cycle support you need when the wind doesn't blow and waves don't wave and the sun doesn't shine. If you're happy to pay [almost] eight times for your energy that's fine, you can go to solar PV. But a lot of people can't afford that."

The stationary electricity sector is responsible for almost 50 per cent of the country's greenhouse gas emissions.