| 09.10,19. 10:14 PM |
Higher power bills caused by 'chaotic' government interventions, report says
The Grattan Institute report found government interventions into Australia's energy sector are raising power prices (AAP)
"Chaotic" government interventions into Australia's energy sector are raising power prices and scaring off investment, a report has found.
The national energy market will need about $400 billion in new power-generating infrastructure over the next three decades, the Grattan Institute said in a report released today.
But policies like the federal government's touted "big stick" power legislation - which would allow it to break up energy monopolies - are hurting investment.
Nine Finance Editor Ross Greenwood says Australia lacks enough power generation for the national grid, highlighted by the power blackouts in Victoria last year.
"The report shows [power] companies have made more money, and that really government intervention has meant not enough new energy sources have been built," he told Today.
He says the lack of supply and high prices risk becoming worse with the closure of coal-fired power stations around the country and the failure of renewables to fill the energy gap.
The report found state, territory and federal governments interventions in the sector had been "ineffective at best, or counterproductive at worst".
The federal government's climate policy "vacuum" had also meant state and territory governments had stepped in with "uncoordinated and chaotic renewable energy targets".
But the institute said while the federal government sat out, state and territory governments should work towards a nationally-consistent, emissions reduction policy.
"While a national policy led by the federal government would be ideal, a state-based policy would be far superior to no policy at all," it said.
The institute said projects like the South Australian government's "rushed" investment in diesel generators or the federal government's Snowy 2.0 project crowded out other investment, which could better address market needs.
The report said power company's profits appeared to have peaked, but would decline further as new investment came online, with the rise in profits not matching the rise in prices and contradicting the motivations behind the federal government's "big stick" policy.