Australia’s rising retail electricity prices, which have climbed about 40 percent in the past four years, are unsustainable, Resources Minister Martin Ferguson said today.
“This is hurting households and businesses and it is simply not sustainable,” Ferguson said in a speech in Melbourne. “High prices result from a range of complex factors, many of which lie outside the control of any single government or regulator. They include higher production costs and the need to replace or upgrade aging infrastructure.”
Ferguson today released the government’s energy policy strategy 11 months after announcing a draft of the report in which he called for the sale of more state-run energy assets to help drive electricity and gas investments. The industry has a pipeline of about A$270 billion ($281 billion) of projects in development, he said.
Other challenges that need to be addressed in Australia’s energy industry include securing gas and liquid fuel for domestic use, with closures of refineries expected to reduce domestic refining capacity by about 28 percent in 2014 from 2012 levels, he said.
“Governments at all levels must embrace key reforms, including improving the efficiency of electricity networks, establishing effective competition and removing retail price caps, providing for greater demand-side participation and moving towards cost reflective pricing,” Ferguson said.