Electricity shouldn’t be a luxury item, but for a growing subset of South Australians the cost of using power is already out of reach. You only have to look at the numbers: last year 10,179 households in our state were disconnected from electricity for inability to pay.
You’ll be hard pressed to find anyone happy about the recent price rises announced by electricity retailers in South Australia, but we should all recognise that the people who will be hardest hit are also those who can least afford it: South Australians on low, or fixed incomes, casual workers, renters and people living in regional communities.
When a companies like Energy Australia and AGL increase prices across the board by 10-12% that means someone on a low or fixed income must decide between basic necessities. Some of the clients our financial counsellors see are already paying two thirds of their income on rent, plus energy costs. It doesn’t leave much spare change for food, let alone any other basics; and this is why Uniting Communities has been campaigning against rising electricity costs in our state for more than a decade.
Future generation costs are given by electricity companies as the reason behind the latest increases with uncertainty over future generation prices being passed on to consumers. I have no doubt that the number of households having their power disconnected this year will rise as a direct result.
At such a time it is critical that we understand the challenges, facts and possibilities of our state’s energy future, and share a commitment to greater fairness.
The challenge has two major aspects, the first of which is price. Economic history tells us that from the Industrial Revolution onwards one of the best ways to grow the economy is through cheap energy. The post-World War II manufacturing growth in this state was built on the back of relatively cheap electricity from the coal-fired Port Augusta power station. Lower prices for an essential service also increase fairness among households.
The second challenge is climate change with energy production being the single, largest contributor to carbon dioxide emissions into the atmosphere. Last year, leaders from around the world reached an agreement in Paris to try to limit global temperature increase below 2°C, with each country committing to five-year plans for reaching this goal. Fairness is also at the heart of such action, as our children and grandchildren also deserve to inherit a clean and healthy environment.
These challenges are big, but so are the opportunities to creating a fairer energy future.
The International Energy Agency (IEA) reported last year that the cost of producing electricity from renewable sources, such as solar and wind, has dropped significantly over the past five years. The IEA also said that “costs are expected to change considerably in coming decades as new technologies are deployed. Coal plants will become as much as 70% more expensive if they include equipment to capture carbon emissions, while (offshore) wind and solar costs are expected to fall.” The cost of generating electricity is only going in one direction – down. Likewise, other new technologies such as battery storage is also expected to fall substantially as technology improves and economies of scale in production are utilised. The question is – how can such savings be passed onto consumers?
Many South Australians have grabbed this opportunity by installing solar on their rooftop, which gives them control over their power bills and much greater certainty about future bills. Statistics show that the majority of people with rooftop solar are from relatively low to middle-income households. However, this opportunity is still out of reach of about 30% of the population who are renters, both in private and public-owned housing, because they don’t own their houses.
That’s where community power comes in, of which there are many interesting examples emerging in Australia and overseas. Focus from all political parties is needed to ensure that lower-income households are not locked out of the benefits from lower electricity prices and greater certainty that they can receive through renewable energy, as the prices continue to fall and bills rise.
We are supporting a call, driven by the Smart Energy Communities campaign, to develop programs and support innovation in new social enterprise business models that increase access to clean, affordable energy for low-income households, renters, apartment dwellers and small businesses that don’t already have access to solar energy.
Considerable energy possibilities lie just around the corner for South Australia, and we want to ensure renewable energy is used not only to power our state but also to make life fairer for all South Australians. In the United States, roughly 1.75 million jobs are now found in the energy efficiency and renewable energy sectors, and there can be little doubt about growing more such employment opportunities here. But most importantly, how can we target the creation of jobs in regions that already have higher unemployment?
Our state has a very bright future if we make sure that our electricity supply is not only cheap and environmentally sustainable, but also accessible to all.