22 February 2012 – The Total Environment Centre will today (Wednesday) launch the first report card on the national electricity market and says that poor environmental performance is no surprise given that the system encourages greater use of electricity rather than to save it.

TEC executive director Jeff Angel said the NEM costs consumers 50 per cent more every year than the entire national broadband network, but has not been fully audited.

The report card, commissioned by the TEC and produced by the Institute of Sustainable Futures at UTS, examined 12 criteria and international and national benchmarks. TEC gave the worst ranking to the 14-year old NEM for its environmental performance.

The report ranks the performance of the NEM against the national electricity objective, which is to promote “the long term interests of consumers of electricity”.

The poor environment performance was no surprise ,according to Mr Angel.

“Since the national electricity rules pay networks and retailers to encourage households and businesses to consume more electricity, rather than to save it there is no incentive to reduce greenhouse emissions.  Nor is this main driver of price rises adequately constrained,” he said.

“TEC has been advocating for eight years for changes to the rules to encourage more energy conservation and efficiency and demand management. The current federal government has finally got the energy efficiency message, with a range of new grant programs just announced and the likelihood of a national energy savings initiative being implemented later this year.

“But we still need the NEM objective to complement national climate change policy by recognising environmental and social outcomes. We also urgently need changes to the rules to incentivise energy companies and consumers to save energy.

“It’s time for Australia’s electricity market to reflect the massive shift that is happening in energy markets around the world, with the transition to clean energy generation and energy efficiency measures at its core”, he said.

In rankings from  A (very good) to F (very poor) the report card said  price and security ranked C; reliability, B; energy efficiency and demand management, D and environmental performance F, as measured by greenhouse gas emissions and intensity and renewable energy generation.

The report recommended ways the NEM and the NEO might be reformed to better serve the long term interests of consumers taking account of community aspirations, the need for transparency and that the NEM should be better integrated into broader policy implementation. These included:

  • That the Standing Council on Energy and Resources requires annual public performance reporting of the NEM against the criteria of the NEO
  • Public reporting on the performance of the NEM extended for the consumer side of the market, particularly in relation to customer bills, customer energy efficiency, demand management, protection of vulnerable customers and customer satisfaction.
  • The NEO be amended to incorporate social and environmental criteria for the long term interest of consumers in addition to the existing technical and price criteria.

The report card is being launched  a Green Capital lunch in Sydney.