❓ The Minister for Energy addresses concerns about rising electricity subsidies and prices, announcing a comprehensive review of the electricity market and industry structure due to the failure of previous reforms. The review aims to identify and rectify systemic issues to reduce the financial burden on the state.
AnsweredQoN 103Legislative Assembly
QuestionView source ↗
ELECTRICITY MARKET REVIEW
103. Mr J. NORBERGER to the Minister for
Energy:
Can the minister please update the house on the electricity market
review that was launched by the Liberal–National government last week?
103. Mr J. NORBERGER to the Minister for
Energy:
Can the minister please update the house on the electricity market
review that was launched by the Liberal–National government last week?
AnswerView source ↗
I would like to thank the member for the question. It is a very
important one. As the member knows, government subsidies to the energy sector
in Western Australia have grown significantly over the last five years. Despite
an 80 per cent increase in electricity prices during that period, the subsidy
has more than doubled to $500 million a year. Over the forward estimates, the
government will be subsidising electricity in the south west to the tune of $2 billion.
That can be compared with the other states, where the subsidy is zero, so it is
a major financial burden to the Western Australian government.
The reason the subsidy has increased and we have had significantly
increased electricity prices in the last decade is that the so-called reforms
that were put in place in the market have failed on all counts. The objective
stated in those reforms was to lead to downward pressure on prices. An 80 per
cent increase in electricity prices and an increased subsidy is not a sign of
downward pressure on prices. The former government put in a system that is very
costly. We have anywhere between 20 per cent and 30 per cent excess capacity in
the market. We have too much and a poor mix of power generation. The most
important factor and the primary objective of the reform was to get the private
sector to invest in plant and take the risk off the government sector. The
private sector did make substantial investments, but most of the risk is
underwritten by the state, and when consumption flatlined, the state, through
Synergy and Verve, has picked up all the risk. This is a huge mistake in
that reform, and we have to look at it systematically, so I have announced a major
review of energy covering not just the wholesale market, but also the industry
structure. I have appointed Paul Breslin, a well-known Brisbane-based analyst,
to lead it. He will be joined by Ray Challen, head of the Public Utilities
Office, and Nicky Cusworth, a senior executive with the Department of State
Development, to spend next year undertaking a review, and make recommendations
at the end of the year to fix the electricity system. It is probably our most
important reform because we are putting $2 billion for this industry into the
forward estimates, when we should not have to subsidise it at all.
important one. As the member knows, government subsidies to the energy sector
in Western Australia have grown significantly over the last five years. Despite
an 80 per cent increase in electricity prices during that period, the subsidy
has more than doubled to $500 million a year. Over the forward estimates, the
government will be subsidising electricity in the south west to the tune of $2 billion.
That can be compared with the other states, where the subsidy is zero, so it is
a major financial burden to the Western Australian government.
The reason the subsidy has increased and we have had significantly
increased electricity prices in the last decade is that the so-called reforms
that were put in place in the market have failed on all counts. The objective
stated in those reforms was to lead to downward pressure on prices. An 80 per
cent increase in electricity prices and an increased subsidy is not a sign of
downward pressure on prices. The former government put in a system that is very
costly. We have anywhere between 20 per cent and 30 per cent excess capacity in
the market. We have too much and a poor mix of power generation. The most
important factor and the primary objective of the reform was to get the private
sector to invest in plant and take the risk off the government sector. The
private sector did make substantial investments, but most of the risk is
underwritten by the state, and when consumption flatlined, the state, through
Synergy and Verve, has picked up all the risk. This is a huge mistake in
that reform, and we have to look at it systematically, so I have announced a major
review of energy covering not just the wholesale market, but also the industry
structure. I have appointed Paul Breslin, a well-known Brisbane-based analyst,
to lead it. He will be joined by Ray Challen, head of the Public Utilities
Office, and Nicky Cusworth, a senior executive with the Department of State
Development, to spend next year undertaking a review, and make recommendations
at the end of the year to fix the electricity system. It is probably our most
important reform because we are putting $2 billion for this industry into the
forward estimates, when we should not have to subsidise it at all.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.