Power Bills. How renewable energy effects them.

Episode 41,   Mar 14, 04:44 AM

Simon Vardy, a Partner at Deloitte specialising in energy transition within the utilities industry, discusses the ramifications of Australia moving from fossil fuel generated power to renewable energy with Burgernomics host Ross MacDowell.

Australian households are experiencing high gas and electricity bills due to increased overseas demand including sanctions on Russia for invading Ukraine.

Coal-fired power stations are closing because they can't compete with cheaper renewable energy. Households are waiting for cheaper renewable energy, but it's not that simple. Will power bills reduce with renewable energy?

There is not enough renewable energy to replace the declining supply of coal-fired electricity, resulting in a 20-35% increase in electricity costs this year. Blackouts are a risk due to the number of planned coal-fired power station closures.

Australia currently produces 32% of its energy through renewable sources and 68% through fossil fuels. The government aims to have 82% of Australia's energy needs come from renewables by 2030. This timeline may not be realistic due to the declining number of Australian power plants producing less electricity and keeping prices high.

Renewable energy is not harvested at the same locations as fossil fuel power stations, requiring 10,000 km of new high-voltage transmission lines. Some experts estimate it will cost $66 billion to electrify all 5.1 million Australian households, but the federal government has only mentioned a $20 billion corporation to upgrade Australia's energy transmission system, including new transmission lines.

Renewable energy infrastructure costs involved in meeting the government's renewable power objectives will keep household power bills high for decades.

However, Australia has is one of the richest supplies of renewable energy in the world. When we develop the renewable energy infrastructure, Australia will have a massive economic opportunity to supply the rest of the world with energy and carbon zero produced goods.

The biggest stumbling block is the unlikelihood that Australia's target dates for becoming reliant on renewable energy can be met under current scenarios. Overseas infrastructure suppliers may not be able to provide the cabling, wind turbines, solar collectors, etc to supply Australia, as their order books are already full, and their own governments have placed export restrictions on them to meet their own targets.