Energy users warn against compensating coal fired generators for carbon tax

Monday, 11 Jul 2011

It is reported that commercial and industrial energy users have cautioned against compensating coal fired generators for the carbon tax, saying this would crimp the assistance available for other businesses.

Mr Roman Domanski executive director of Energy Users Association of Australia said that power generators would pass on higher electricity prices to users despite getting assistance that could include emergency government support for their debt and payments for the closure of some brown coal fired power plants in Victoria and South Australia.

Mr Domanski questioned claims the security of energy supplies was at risk without the aid measures and cautioned that the measures could mean there was less revenue from the carbon tax to compensate other sectors. He said that "One of our biggest concerns is that the government's approach will leave open and vulnerable a considerable number of firms who are exposed to international trade, who pay a fair bit of money for electricity, but who isn’t going to be compensated."

Mr Domanski, who runs an organization whose members include Australian Paper, vegetable maker Simplot and Rio Tinto, said that he was yet to be convinced that compensation for generators was warranted and noted concerns raised by Labor's chief climate adviser Mr Ross Garnaut.

He said that "We have looked at the arguments put up by the coal fired generators. We have a lot of trouble joining the dots to get to the point where we can see justification. We don't think there's much risk at all to electricity supply."

Concerns are growing among power stations that the government will expand its Energy Efficiency Opportunities program, which encourages companies to find ways to use less energy. Generators fear the program will be altered to require them to implement any efficiency savings that would generate a positive return, meaning they could be forced to divert resources to projects that would save fuel even if this only gave them a small saving.

Mr Malcolm Roberts executive director of National Generators Forum said that "The carbon price will be the incentive for businesses to find energy efficiencies. Filling in forms and paying consultants will not yield any more energy savings."

(sourced from TheAustralian)