Carbon Tax offset by Lower Prices

It is said by a leading Consultant that wholesale power prices have been driven down due to increased competition between electricity generators fighting for a lowering market.  This is helping to offset a great deal, if not all of the carbon tax effect.

Principal Consultant Hugh Saddler from Pitt & Sherry states that figures in the year to August for the demand of power across the National Electricity Market that serves the eastern states and South Australia have fallen another 1.4 terra-watt-hours compared with the 12 months to July.

Electricity use peaked in 2006-7 on a per capital basis.  It is believed that rising power prices, greater energy efficiency measures and falling demand from energy-intensive industries such as smelting, have been the cause of the lessening demand since then.  A large portion of south-eastern Australia had a record mild winter which weakened demand even further.

Analysis by Pitt & Sherry shows costs for users have dropped along with wholesale prices, helping consumers cope once the carbon tax kicked in – even before households received their federal assistance.

A study by Pitt & Sherry showed that consumers coped better once the carbon tax kicked in even before they received their federal assistance due to the reduction in costs for users and also wholesale prices dropping.

They also found that in Tasmania and Victoria the per capital carbon cost in 2012-13 varied between $43 and $179 respectively due to its much more emissions-intensive electricity.

Due to the combination of lower wholesale prices and reduced consumption,

during the previous few years the total non-carbon wholesale costs dropped by almost as much (or sometimes more).

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