Renewable energy scheme cost $3.2 billion: Origin
The federal government’s small scale renewable energy scheme has cost households $3.2 billion over the past two years alone, according to Origin Energy.
At its annual general meeting today, Origin managing director Mr Grant King said the funds could have easily funded a roll-out of smart meters which would help cut electricity use.
‘‘The uncapped nature of the small scale renewable scheme has led to an increased cost of the scheme to customers of about approximately $3.2 billion,’’ he said.
“The $3.2 billion cost of the [scheme] would have allowed most Australians to have smart meters installed.”
The small scale scheme forms part of the federal government’s renewable energy target for at least 20 per cent of Australia’s electricity supply to come from renewable sources by 2020.
Origin estimates renewable energy could supply up to 27 per cent of electricity by 2020.
‘‘This will come at a considerable cost,’’ the chairman Mr Kevin McCann said. ‘‘Homes and businesses will bear the cost and are likely to be unaware of that. In addition, there will be technical build and grid impact issues that must be carefully considered.’’
“I never thought Australia would be in this position where the dysfunctional regulation between state and federal authorities could cost us, for example, the flawed Queensland pricing determination mechanism.”
The cost of complying with the renewable energy scheme was a prime factor in Origin’s profit downgrade at the end of last week. It now expects no profit growth this financial year, which has pushed the company’s shares to 5-year lows.
Origin also attributed the share price slide to a “lack of patience by investors who are concerned whether large resource projects like [Origin’s] APLNG will be on time on or within budget”.
Shareholders expressed concern about the impact of coal seam gas extraction by the company, with one shareholder worried that Origin may become ‘‘a modern day James Hardie’’, in reference to that company’s ongoing asbestos liability.
“We won’t jeopardise our social licence and we certainly don’t want to be a James Hardie,” Mr McCann said. “We have a team of environmentalists working with the government under strict regulations in Queensland. But it is important to note that gas is no longer a transitional fuel."
Shareholder concerns about the lack of geothermal, solar and wind energy production dominated the rest of the meeting.
Mr McCann said investment in renewable energy is not cheap in Australia, although the company is active in overseas countries such as New Zealand and Chile, where it is more competitive.