The Unreliable Promise of Renewable Energy

Renewable energy targets have dominated energy policy for decades, with advocates and politicians enthusiastically setting targets without adequately considering the actual costs and outcomes. The Northern Territory's former government pursued a 50% renewable energy target by 2030, despite promising astronomical savings that never materialized. Instead, power bills skyrocketed, with the community service obligation (CSO) increasing by over $100 million by 2025 and expected to hit $192 million in the next financial year.

Key Takeaways:

• The NT's 50% renewable energy target by 2030 was abandoned due to a predicted cost of $5 billion, although the accuracy of this estimate is questionable.
• A 2018 report by consultants Houston Kemp predicted cost increases more modest than the ones claimed by the NT government, with the CSO expected to increase by $25-$29 million by 2030.
• By 2025, the CSO had increased by over $100 million, and is expected to reach $192 million in the next financial year.
• The CSO increase shows that the Houston Kemp report significantly underestimated the actual rise in the cost of producing electricity.
• The depletion of gas from the ENI's blacktip field has also contributed to the rise in electricity costs, with the government forced to buy gas from Santos and Inpex, and at times rely on diesel.
• Territorians can expect power prices to rise by 3% in July, with large commercial customers facing higher tariffs and potential price increases beyond the next financial year.

Statistics:

• $5 billion: Predicted cost of achieving the 50% renewable energy target by the NT government.
• $25-$29 million: Predicted increase in the CSO by 2030 according to the Houston Kemp report.
• $100 million: Actual increase in the CSO by 2025.
• $192 million: Expected CSO by the next financial year.
• 3%: Power price increase for domestic customers in July.
• 55kwh: Daily energy consumption threshold above which domestic customers will be charged a higher rate from January 1 next year.
• 192 million: Territorians to be affected by increased CSO costs.

Sources:

• "The NT's CLP Government scraps the 50 per cent renewable energy target" (no date or publication date available).
• Houston Kemp report, written in 2018, predicting $25-$29 million increase in CSO.
• Territory government reports on CSO costs.
• Beetaloo Energy and Tamboran Resources domestic gas supply agreements with the NT government (2023).
• Interview with Beetaloo Energy managing director Alex Underwood (no date or publication date available).