The Electric Fields is a series looking at how the Australian Government and its contractors are using the electricity sector to promote the commercialisation of electric fields.
The series, which has covered electricity infrastructure, is also examining the electricity industry and the use of private equity funds to buy up and privatise infrastructure.
The government’s decision to open up the electricity market to private investment is seen as a major shift from previous government policies and is a major reason why the average household electricity bill is currently almost 30 per cent higher than in 2016.
“The electricity market is the biggest driver of electricity prices and is the reason for the electricity price hikes,” Energy and Resources Minister Josh Frydenberg told the ABC.
“That’s why we need to diversify the market, to create opportunities for small and medium businesses to compete with established players.”
Mr Frydenberger said the Government was targeting “a significant improvement in the average electricity bill” by opening up the market.
“We’ve got a really strong energy market,” he said.
“What we’ve seen is that people have been very supportive of the change to the electricity pricing system.”
He said the changes would mean that “the cost of energy is going down for a lot of people”.
In addition to a decrease in the electricity bill, the Government has also introduced a “value-added tax” that will cost households up to $1,000 a year more than they would have been paying if they had to pay for electricity by stamp duty.
“This tax will also lower electricity bills,” Mr Fryderman said.
The Government says the tax will be introduced in the next financial year, although the new tax is not due to take effect until 2020.
A spokesperson for the Minister of the Environment, Greg Hunt, said the tax would be introduced to “fund the growth of the renewable energy sector”.
He said that the Government would look at the impact on the electricity supply system.
“While there will be an impact on power prices and other impacts on the wholesale market, the carbon price is one of the most effective ways to improve the quality of the energy we buy,” he told the National Press Club.
“A carbon tax will make it cheaper for Australians to consume the renewable and low-carbon energy they need to feed their families.”
The Government has been pushing for a “green tax” on electricity and other forms of energy since 2017, and has recently signed the Green Tax Agreement with the United States.
It is also considering introducing a “power price freeze” to freeze electricity prices for five years.
The Federal Government’s electricity pricing policy is a “strategic” one, and is aimed at keeping electricity prices low for Australian households and businesses.
The policy includes the “green” tax, which would freeze electricity bills and increase the price of other energy products.
However, the Green Policy Agreement, signed by the US President Donald Trump in November 2018, contains provisions that would allow the Government to impose carbon price caps, with no guarantee that the price would remain low for longer.
The Federal Environment Minister Greg Hunt says the Government will not introduce a “carbon price freeze”.
“We’re going to continue to focus on making sure that we do our part to address climate change and the carbon budget,” he says.
The Green Tax is likely to be a key component of the Government’s climate policy, with Mr Hunt promising to reduce the carbon tax rate from 35 per cent to 15 per cent.
The “green energy” tax would include an increase in the price for renewables.
Mr Hunt said the price increase for renewables would “not be too large”.
However, there is no guarantee the increase would last.
“In terms of the carbon pricing policy, we are committed to reducing our carbon price by 15 per to 20 per cent over the next five years,” he explained.
The Greens have said the “biggest climate change crisis since the industrial revolution” will continue to be the emissions from the coal, gas and oil industries.
The party has been strongly critical of the policies the Government is putting in place.
“Climate change is the greatest threat to our future as a nation, to our people and our environment, and we will continue our fight to protect the climate,” Greens leader Christine Milne said in a statement.
“Under the Coalition’s climate change policies, we will not reduce emissions until the cost of living has been reduced to zero.”
We need to start now by reducing our emissions and ending the dirty energy industries, like the mining and coal mining, that will harm our economy and our planet for generations to come.
“Mr Hunt also said that Labor would not introduce any new tax, but was considering introducing “a carbon price freeze.
“Labor has previously said it would not implement a carbon price cap, and was “still committed” to doing so.
However the Government and the Greens are also discussing whether a carbon tax should be introduced as part of the Federal Budget.
The Energy Minister says the “power market” is a significant driver of Australia’s electricity price