Skip to main content

Proposed Australian fossil fuel subsidies soar, potentially hike consumer prices

August 20, 2021

Renew Economy:

Households and businesses could be hit hard by major electricity bill increases if a proposed new subsidy to keep ageing coal and gas plants to stay open is approved by state and federal energy ministers.

The Institute for Energy Economics and Financial Analysis (IEEFA) and Green Energy Markets say the cost of capacity payments made to thermal generators, under a plan proposed by the Energy Security Board and championed by federal energy and emissions reduction minister Angus Taylor, could be as high as $6.9 billion.

That estimate is double their previous calculations, and would push the average annual household electricity bills up by between $182 and $430 a year, significantly more than the cost increases from the Gillard government’s carbon price that was subsequently repealed by the Abbott government.

Federal and state energy ministers meet on Friday to discuss the ESB’s proposal for a ‘Physical Retailer Reliability Obligation’, a type of “capacity payment” that would see large coal and gas generators receive substantial payments to remain operational.

[Michael Mezengarb] 

More:Taylor’s favoured coal subsidy could reach $7 billion and hit households

Join our newsletter

Keep up to date with all the latest from IEEFA