Electric bills are an important part of the budget for many households in Australia, with many of them taking a cut in electricity bills to supplement their basic income.
The cost of electricity is also rising as demand for renewable energy rises.
The Government announced last month that it was introducing a pilot program to increase the amount of electricity the country receives from the electricity market.
Electricity from the national electricity market is about $6 per megawatt hour (MWh) and provides about 10 per cent of Australia’s energy consumption.
The pilot program will cover the supply of about 500 megawatts of power for the next five years, starting in 2020.
The new power purchase agreement will see a 50 per cent increase in the price of electricity from the wholesale electricity market and will be extended to include the entire electricity supply market.
The agreement will also allow the wholesale power market to be used as a pricing mechanism for electricity from other sources.
Currently, the wholesale market is not allowed to be a pricing vehicle, and the Government will allow the market to take over when the wholesale price of power rises below the wholesale cost.
In addition, the pilot program also includes a commitment to create a “zero-emission market for electricity”, meaning that the power generated by a small generator will be free of any pollutants, including CO 2 .
The Government said the pilot project would create an incentive for Australian businesses to adopt zero-emissions technology and that the pilot will also be used to support the adoption of renewable energy technologies.
While the pilot is part of a broader policy shift towards reducing emissions, it will also affect the supply and demand of electricity for consumers in the future.
This article first appeared in the Financial Review.
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