Western Australia's retail energy market must have cost reflective pricing to encourage private sector investment, enhance competition, and grow market diversity in the energy industry, according the Western Australian Sustainable Energy Association Inc. (WA SEA)

The Barnett Government must move Western Australia's retail energy market to cost reflective pricing to encourage private sector investment, enhance competition, and grow market diversity in the energy industry, according the Western Australian Sustainable Energy Association Inc. (WA SEA).

"Removing barriers to market entry and providing incentives for private sector investment in Western Australia's energy network is the key to security of WA energy supplies," says Dr Ray Wills, Chief Executive of WA SEA, the business chamber for sustainable energy industries in WA.

"Continuing energy market reforms that started with the disaggregation of Western Power in 2006 are strongly supported by industry to create a competitive market, and those reforms are not yet complete - cost reflective pricing is a key reform that has yet to be tackled," says Dr Wills.

"To sell any product under cost leads to wasteful use and is not sustainable - generators need to charge a price that reflects the costs in generating electricity. Previous Western Australian Governments have failed to increase the price charged for electricity over a 17 year period, despite increases in costs, and in particular the cost of fossil fuel and network expansion pressures - this is not sustainable," says Dr Wills.

"The lack of cost reflective pricing is one reason why renewable energy projects have had difficulty competing in the energy market. A low electricity price effectively subsidises and protects more polluting energy generation built in the last century, while new projects must be built geared to enter a low-priced market, and for new technologies that invariably bear a higher cost of establishment, the current price structure is effectively blocking innovations in the energy market".

"The primary need is to approve increases in electricity prices that allows generators to charge the real cost of generation. This is the most responsible action and WA SEA also urges the Barnett Government to continue energy market reforms including commencing full retail market contestability."

"In moving forward on energy reform, it is important that the Premier Colin Barnett and Energy Minister Peter Collier consult with industry bodies including the WA Sustainable Energy Association as they looks to address this issue. In doing so, the Barnett Government will find strong industry support for his desire for the development of good energy policy for Western Australia," says Dr Wills.

"Concerns in the community about increases in energy pricing are understandable - these can be addressed by offering assistance packages to battlers that improves their home energy efficiency. And if this is combined with provisions to install renewable energy on the roof together with a gross feed in tariff for domestic generation and for small and medium enterprises, many will avoid the energy price as they will be generating and selling their own energy."

"Cost reflective pricing will help ramp up use of Western Australia's massive renewable energy resources and new projects will be able to take advantage of the money flowing from Canberra. Such measures will diversify and grow Western Australia's sources of energy, increase WA's industry base, and create a more robust environment for business and a more sustainable economy for the State," says Dr Wills.


WA Sustainable Energy Association Inc. (WA SEA) Media Release - 30 January 2009

Media Contact:
Dr Ray Wills 0430 365 607

Editors notes:
1. The Western Australian Sustainable Energy Association Inc. (WA SEA) is a chamber of businesses variously promoting, developing and/or adopting sustainable energy technologies and services that minimise the use of energy through sustainable energy practices and maximise the use of energy from sustainable sources. WA SEA is supported by a growing membership of over 200 industry members from a diversity of businesses. www.wasea.com.au