The Prime Minister continues to claim that “The RET is very significantly driving up power prices,”. He has made this claim in the past and linked the Renewable Energy Target (RET) to energy costs going up. Despite an existing regulated review process, based on this claim the Prime Minister established an additional review of the RET.
Although The Australia Institute has refuted this false claim previously, its repetition requires a reminder of the facts.
According to the ABS retail electricity prices doubled in the six years from December 2007 to December 2013. The RET, however, only accounted for between three and four and a half per cent of that increase. According to the Independent Pricing and Regulatory Tribunal (IPART) increases in the cost of the transmission and distribution network made up the majority of the increase.
The small increase attributable to the RET is being offset, however, as renewable energy generation is pushing wholesale electricity prices down. This downward pressure on wholesale prices will fully offset the increase in retail prices in the next few years.
Even preliminary results from the government’s own modelling commissioned for its review show the RET will cause electricity prices to be lower than if the RET did not exist.
Claims the RET has ‘significantly’ driven up power prices is not supported by the evidence and within the next few years it is likely the policy will have decreased power prices.