Federal Politics

Greenchoice customers do well despite carbon tax

The announced tender winner to build a solar farm at Royalla at a supply cost of 18.6c per kilowatt-hour (''ACT to get Australia's biggest solar power plant,'' September 6, p2) highlights the high cost of electricity from renewables.

The cost per kilowatt-hour from this solar farm will be about three times the cost of coal-fired electricity. As this price is from the tender winner, we can be confident that this is a competitive price.

However, even at this price it is still about 12.5c more per kilowatt-hour than power from coal-fired power stations, even though they are now paying the carbon tax.

Assuming there is no extra cost in distributing this renewable power and ActewAGL passes on this power for no profit, it is still about 167 per cent more than the 7.5c per kilowatt-hour extra that ActewAGL Greenchoice customers pay.

John Morland, Curtin

Regarding The Canberra Times' editorial ''Symbolic Solar Farm Initiative'' (September 7, p18), exposing the humbug behind the ACT government's solar farm program, doesn't the government know, or is it hoping that the voters don't know, that while green energy fails to provide guaranteed continuous 24/7 peak load capacity that existing coal fired generators will have to provide continuous 24/7 peak load back-up, that is running at peak load capacity regardless of the actual demand.

Since the government's green power programs are having zero impact on carbon pollution, and costing substantial (wasted) taxpayer's money, shouldn't they be accused of misleading the public?

Ed Dobson, Hughes

GreenPower products such as Greenchoice, and electricity pricing in general, seem poorly understood. ActewAGL's Greenchoice is essentially a retail price for Renewable Energy Certificates. When I buy 100 per cent Greenchoice, ActewAGL must purchase and surrender enough extra RECs to match my electricity consumption. That causes extra renewable power generation to occur.

At any given time power generators bid to sell power into the electricity grid. In addition to selling the power competitively, renewable generation is awarded RECs representing the actual power put into the grid. Conversely, power generation from fossil fuel is penalised by a carbon price on emissions. The Renewable Energy Target means that each year a certain proportion of the electricity generation must be renewable. Retailers of electricity must purchase and surrender RECs representing that proportion of their sales. That proportion is ramping up to 20 per cent by 2020. ActewAGL's Greenchoice and other audited GreenPower products are voluntary, additional purchasing and surrendering of RECs.

As all the power goes into one bucket, these certificates are the accounting mechanism to keep track. An organisation planning to install a power generator of some sort would consider electricity prices, the stick of carbon pricing, and the carrot of RECs sales in judging what ventures might be profitable. Additional demand for RECs from sales of GreenPower causes genuinely additional renewable energy to go into the grid since the generation must occur for the certificates to exist.

If RECs were in short supply their price would rise and with it the incentive to make new renewable generators to meet the demand.

ActewAGL is correct when saying that the carbon price is already mixed into the electricity wholesale prices it pays to purchase power out of the above-mentioned bucket. It is also correct in saying that buying Greenchoice/RECs is a different thing. ActewAGL could choose to sell Greenchoice/RECs at a slightly lower price and spread the (small) increase it pays on wholesale electricity owing to carbon pricing just among its non-GreenPower customers.

Peter Campbell, Cook