Australia's clean energy push to drive tariffs higher, regulator says - Reuters

Australia's clean energy push to drive tariffs higher, regulator says | Reuters

Australia's clean energy push to drive tariffs higher, regulator says

A solar array, a linked collection of solar panels, can be seen in front of a residential apartment block in the Sydney suburb of Chatswood in Australia, July 28, 2017. REUTERS/David Gray/File Photo Acquire Licensing Rights

SINGAPORE, Oct 25 (Reuters) - Australia's efforts to increase renewable energy supply through upgrades to its power transmission infrastructure and measures to stabilise its grid will result in higher electricity tariffs, a regulatory official told Reuters on Wednesday.

The country of more than 25 million people already has the second-highest retail electricity prices for both households and businesses in the Asia-Pacific region, according to the website globalpetrolprices.com, and its power market is the world's most volatile, consultancy Rystad Energy said in a report this week.

The world's sixth-largest country by land area also sees frequent adverse climate events such as forest fires and floods, which experts have attributed to climate change and point to when stressing the importance of slashing emissions globally.

"If you put aside sort of short-term global conditions, you'd expect to see prices start to rise for a period of time because of the increase in network investment that's going to be needed," Justin Oliver, board member at the Australian Energy Regulator (AER), said of Australian retail power prices.

Oliver did not provide exact details on how much prices would rise and for how long. The AER regulates electricity networks and oversees prices and activity on the national electricity market.

Australia plans to increase the share of clean energy to as much as 82% of overall electricity supply by 2030 from about a third now, and the government plans to spend $20 billion to make its grid more reliable, amid increasing green energy output, and to cut emissions by 43% by 2030.

"I don't know if we're going to get to a situation where electricity is much, much more cheaper than it is today, but we do hope to get back to a position where people are paying roughly what they were paying a few years ago," Oliver said on the sidelines of the Singapore International Energy Week.

Power from solar and wind is harder to forecast and control as it varies with weather conditions, and reliable supply of such power requires improvements to transmission and distribution networks - which are likely to cost at least $2 trillion over the next decade in the Asia-Pacific region.

Many Australians have increasingly hedged against high electricity prices by installing rooftop solar panels, with prices on the spot market turning negative on most summer days.

Australia is also among the world's highest adopters of battery storage, a technology it hopes to make central to its ambitious transition to cleaner power.

Reporting by Sudarshan Varadhan; editing by Robert Birsel

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