Households are expected to save $120 a year on their power bills under the Turnbull government’s energy plan, according to modelling released ahead of a meeting with the states and territories.
The expert analysis puts an extra $5 into the hip pockets of Australian households, compared to initial forecasts released when the national energy guarantee was announced in October.
“The evidence is in,” Prime Minister Malcolm Turnbull said on Wednesday.
“The national energy guarantee will generate significant savings for Australian families and businesses. The savings are greater than originally estimated.”
Average household bills under the guarantee are tipped to be $120 lower between 2020 and 2030 compared to a “business as usual” approach, where the renewable energy target runs out as planned and is not replaced.
The Frontier Economics modelling, commissioned by the Energy Security Board, is being distributed to premiers and chief ministers ahead of a COAG Energy Council meeting in Hobart on Friday.
It expects wholesale power prices will be 23 per cent lower than “business as usual” between 2020 and 2030, including 30 per cent less in 2030.
The 78 pages of modelling also confirms initial advice that the guarantee would ensure Australia’s emissions target of 26 per cent below 2005 levels by 2030 would be met.
“The independent experts have spoken: our plan will cut power bills and ensure the lights stay on,” Mr Turnbull said.
“The benefits will flow through the entire economy. Businesses will be able to hire more staff, pay their employees more and pass on the savings to consumers through cheaper products.”
Mr Turnbull – fresh from promising to put more money in the pockets of Australian families and businesses through income tax cuts – said the advice showed household bill relief would be “real, significant and ongoing”.
“The modelling is a wake-up call to Labor and the states. They should work with government to bring down prices, increase reliability and meet our international emission reduction commitments,” he said.
The guarantee requires electricity retailers to make a certain amount of power available at all times to guarantee reliability, while also guaranteeing certain levels of emissions to help the government meet its Paris accord target.
Federal Labor and some states were critical of the initial modelling and lukewarm on the government’s policy.
Energy Minister Josh Frydenberg is seeking to put to blowtorch on Opposition Leader Bill Shorten.
“Bill Shorten asked for modelling on the national energy guarantee. Now he has run out of excuses because he has modelling from Frontier Economics, a modeller on which Labor has relied in the past,” Mr Frydenberg said.
Earlier this week, independent modelling commissioned by the Climate Council revealed there could be 6,600 fewer jobs in electricity in 2030 under the government’s National Energy Guarantee (NEG) compared to “business as usual”.
The ‘Renewable Energy Jobs: Future Growing in Australia 2017 Supplement’ report predicted there could be 20,000 fewer jobs compared to a 50 per cent renewable energy target by 2030.
Expected annual savings on energy bills:
- Average households: $120
- High energy-using households: $170
- Small businesses such as cafes: Hundreds of dollars
- Medium businesses such as supermarkets: $400,000 +
- Large energy users such as chemical factories: $1.4 million
- Very large energy users such as paper mills: $10 million +