Energy minister Russell Northe

The Victorian Government has pointed to its axing of the state’s energy efficiency target as a win for consumers, even as a business impact statement found benefits to consumers under the scheme outweighed the costs to those not participating.

Announcing the Victorian Energy Policy Statement, Minister for Energy and Resources Russell Northe said the government was “saving the majority of Victorian households paying an extra $50 on their energy bills by closing the Victorian Energy Efficiency Target scheme”, due to be voted on in parliament this week.

In the Energy Policy Statement, a somewhat confused paragraph lauds the fact that the government in its term had “expanded the number of eligible activities under the Victorian Energy Efficiency Target scheme so that more than 60 per cent of Victorian households now benefit from taking up VEET activities”.

It then follows by saying “continuing the program would come at a significant cost to many Victorians”, and the program would be cut.

A business impact statement for the government found that the VEET came at a net cost to the economy of $177.6 million. This was, however, mainly lost profits to electricity suppliers caused by reductions in consumer energy use.

Loss of profits for generators and retailers the real concern for Victorian government

“The benefits accrued by consumers participating in the scheme, while outweighing the costs incurred by non-participating consumers, represent a transfer from energy generators and retailers to these consumers through a loss of profits,” the business impact statement found.

Chief executive of the Energy Efficiency Council Rob Murray-Leach said the Napthine government was “favouring big energy companies’ interests ahead of jobs and families”.

The data the government used to justify its cut was also labelled as “dodgy” by Ric Brazzale of the Energy Efficiency Certificate Creators Association, who along with the Energy Efficiency Council and Brotherhood of St Laurence commissioned a report that found significant benefits to the state of keeping the VEET.

Labor recently committed to re-establish the VEET if elected in November.

The statement also makes no mention of the government’s proposed My Star Energy Scheme, a voluntary home energy rating system the government is planning to roll out from early 2015 as a VEET replacement.

It’s brown wash

Environment Victoria called the Energy Statement a “brown wash”, and said it failed to recognise Victoria’s potential as a renewable energy powerhouse, while also rehashing “tired and failed” plans to create a brown coal export industry.

“This is the energy policy that the fossil fuel industry would have been wishing for,” Environment Victoria chief executive Mark Wakeham said. “It outlines no vision or programs that will accelerate the deployment of renewable energy or energy efficiency programs and is obsessed with exploiting gas and coal deposits.”

He said the statement claimed to support energy efficiency but admitted the Napthine government’s intention to scrap the VEET this week.

“If the government’s bill to scrap VEET passes it will directly lead to the loss of 2000 jobs and drive up energy bills for Victorian households and businesses.”

Key priorities of the statement are:

  • Ensuring competition in Victoria’s retail electricity market continues to help drive energy affordability
  • Empowering Victorian energy consumers to take charge of their bills and make informed choices about energy
  • Moving towards network tariffs that support a resilient electricity system
  • Advocating for further network regulatory reforms and strongly representing the interests of Victorians in regulatory decision making
  • Ensuring a stable environment for long term investment in electricity generation and transmission networks
  • Pushing for a more effective and competitive east coast gas market
  • Investing in technological innovation that leads to commercialisation of Victoria’s energy resources
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