More than $330 million raised by levies on household electricity bills in NSW has been spent cutting carbon emissions in other states - fully a third of all funds raised under the state’s greenhouse gas abatement scheme.
The Hazelwood coal-fired power station in Victoria - one of Australia’s oldest and least efficient electricity plants - has received $42 million from the NSW public to improve its greenhouse performance over the past seven years, even though the Victorian government is trying to get the plant closed.
Altogether $331 million out of the $999 million raised under the NSW scheme, known as GGAS, has been spent interstate on a variety of climate change projects, says the latest review by the Independent Pricing and Regulatory Tribunal. This is despite the scheme’s primary goal being to reduce emissions in NSW.
In an attempt to minimise electricity price rises, the NSW government has set up an inquiry to examine ways of limiting the impact on household power bills, and slashed the rate paid under its solar panel tariff scheme by two-thirds.
GGAS requires electricity retailers in NSW to meet benchmarks for carbon emissions reduction, and they can do this by buying or trading certificates, which are generated by projects that cut emissions. The costs are passed on to households and businesses in their energy bills in varying amounts, depending on the retailer’s pricing policy.
The government told the Herald that GGAS saved money by seeking to reduce emissions from anywhere connected to the east coast power grid.
But the NSW opposition said taxpayers in NSW were unknowingly propping up Hazelwood and other coal-fired plants in Victoria and Queensland.
The Energy Minister, Paul Lynch, said the scheme had lowered Australia’s net carbon emissions by 90 million tonnes since it was established in January 2003, with most of the cuts happening in NSW.
”If only NSW-based projects were allowed under GGAS, then the carbon abatement would be more expensive,” a spokesman for Mr Lynch said.
”This is simply because there would be fewer projects to choose from and less scope for large scale reductions … Carbon emission reductions are good and benefit all Australians, not just those that occur where we live. The benefit for NSW customers is keeping the cost of these emission reduction activities down.”
The opposition said the public was footing the bill for other states which do not have carbon reduction schemes.
“NSW families are subsidising every other state’s emissions except Western Australia’s, and nobody knows exactly how much actual carbon has been saved,” said the Liberal MP Michael Richardson, a long-time critic of the scheme.
Some of the auditors checking the GGAS figures told the Herald they were surprised at the amount of money flowing from NSW to projects being undertaken elsewhere in the national electricity network.
The acting chairman of the Independent Pricing and Regulatory Tribunal, Jim Cox, said that because NSW is part of an interconnected energy system it made sense to reduce emissions via GGAS in the cheapest place possible. ”Hazelwood is a high emission generator but, partly due to GGAS, it has taken steps to reduce emissions below previous levels,” Mr Cox said.
