Emitters pass on price finds report
Some of the country’s biggest carbon emitters are accused of passing on the full cost of the carbon price while pocketing billions of dollars worth of Government compensation, according to a new report released by industry consultants Carbon and energy Markets.
The report, which focuses on brown coal power plants in Victoria’s LaTrobe Valley, concluded that theey were able to pass on 111 per cent of the cost of the carbon price to the market.
The report, prepared for by green group Environment Victoria, found that in the first six months of operation of the carbon pricing mechanism generators have received $1 billion in cash compensation under the Energy Security Fund, and are scheduled to receive billions over the next four years.
“The carbon price package is an important and necessary reform which is already reducing emissions from the electricity sector, but it is a terrible result for taxpayers and the environment if our dirtiest power stations like Hazelwood are becoming more profitable as a result of compensation payments,” Environment Victoria Campaigns Director Mark Wakeham said.
“We now know brown coal generators are passing on the full carbon price and are therefore making massive windfall gains from the compensation payments. Given changed circumstances it is critical that the government reviews Energy Security Fund compensation payments before the next billion dollar handout.”
The report’s author, Bruce Mountain, was equally incredulous over the profiteering of large emitters.
“Assuming the generators are able to pass on a similar proportion of the carbon price in future, the Victorian brown coal generators, which receive over 90% of Energy Security Fund payments, can expect to accrue additional operating profits somewhere in the range of $2.3bn to $5.4bn (Present Value) depending on emission prices in future,” Mr Mountain said.
The full report can be found here