The following chart indicates the wholesale price of electricity, the price that the the power plants sell their power to the retail electricity providers for. This chart compares equal situation with equal situation, both being in the same Month, the first column showing the cost in July of 2011, (pre CO2 Tax) and the second column showing the cost in July of 2012 (post CO2 Tax). That cost is expressed in Dollars per MegaWattHour. So, on the first line there for the State of NSW (New South Wales) that cost in Jul 2011 is that $30.75 per MWH. This equates to just under 3 cents per KWH. At the same time, the retail cost for electricity for residential consumption was 21 cents per KWH.
Note how in every case, that wholesale cost of electricity has more than doubled. This whole cost increase is passed through in full to all areas of electrical power consumption, and equates to an increase in the retail cost for electricity of around 15%…..TonyfromOz.
The carbon tax is hitting wholesale power prices hard, making electricity too expensive for some people to keep using as they were. Which was the idea, of course.
As you can see from the table above, demands have dropped in all the major East coast markets, significantly in the case of NSW, as carbon tax and other issues bite into manufacturing output and Mums and Dads switch their heaters off in response to higher prices. While at the same time prices have jumped by > 120%. Though there have been specific plant availability issues which have contributed to the price increase, this is countered by the demand reductions to some extent. Plant shutdown to avoid carbon liability and the resultant change in network flows due to those plant shutdowns and reconfiguring of the generation supply have contributed far greater increases than had previously been forecast even within the market.
These jumps in wholesale prices if sustained will flow through to ~ 20% increase in retail prices compared to the ~12% that has flowed through as a result of carbon tax to date.
Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am, and his book Still Not Sorry remains very widely read.