The cherry-picking of energy data by a climate lobby group to try and apportion blame for high energy prices is doing the community a serious disservice, according to the Australian Energy Council (AEC).
The AEC, the peak body for retailers and generators, said it was disappointed by the campaigning of the Climate Council because it ignored the complexities involved in the decarbonisation of the grid and the way the National Electricity Market (NEM) is designed to deliver reliable electricity.
The AEC's Chief Executive, Louisa Kinnear, said, "Unfortunately this has the potential to undermine confidence in the energy transition.
"The Climate Council also claims energy retailers are making 'huge profits' from retail margins, yet it reports retail margins represent just 6 per cent of a customer's power bill.
"The most recent ACCC review of the retail market found the majority of consumers pay less than what the Australian Energy Regulator considers to be a reasonable price.
"It also seeks to portray our biggest retailers as the country's biggest carbon emitters, ignoring the fact that they have committed to closing their coal plant and are amongst the biggest investors in the energy transition. Our members are investing hundreds of millions of dollars on batteries, pumped hydro projects, as well as wind and solar farms, and supporting other renewable developers through investment in power purchase agreements.
"The Climate Council makes broad claims to try and justify their argument for accelerating the rollout of renewables, storage and networks.
"It seeks to blame gas in the setting of wholesale prices 'up to 90 per cent' of the time. The referenced research actually points to more variance, stating gas can set the price between 50-90 per cent of the time and the amount of time gas sets prices will always vary greatly depending on a range of factors.
"Regardless, system planners view gas generators as an indispensable 'last line of defence' in maintaining system security as more renewables come into the grid.
"As more battery storage is developed it will increasingly become the price setter and we are already seeing signs of this.
"We can agree the lowest cost pathway to net zero is a renewable energy system predominantly powered by wind and solar, firmed by gas, batteries, and hydropower. This is well understood by industry participants, regulators, and Governments.
"But this pathway requires significant investment, including large scale upgrades to existing infrastructure and the development of new infrastructure to ensure coal generation can exit without impacting reliability. And, as we are finding, it will take time to get it right.
"While we transition to a renewables-dominant energy system, thermal generation like coal and gas will continue to play a critical role in keeping the energy system stable and reliable, particularly at times of high energy demand when the wind isn't blowing and the sun isn't shining.
"The energy system is complex, and apportioning blame doesn't help build understanding, customer confidence, or support for the transition. In fact, it can only lead to a poorer outcome for all energy sector participants and consumers."
About the Australian Energy Council
The Australian Energy Council (AEC) is the peak body for energy retailers and generators operating in competitive markets.
Our members generate and sell energy to over 10 million homes and businesses and are committed to delivering a reliable, affordable and decarbonised energy system for consumers.
The AEC supports net zero by 2050 and recognises the electricity sector's role in reducing Australia's emissions. Our members are major investors in renewables, firming and storage technologies that are critical to ensuring customers continue to receive reliable and sustainable energy supply as we navigate the energy transition.
