What is Australian government doing to slash power bills?

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Highlights

  • The AEMO has suspended some of the solar and wind energy projects as the power crisis worsens in Australia.
  • The central government is making efforts to upgrade the electricity grid to renewable energy.
  • The government has also enforced support payments alongside state-sponsored payments.

The electricity crisis in Australia has taken a new turn as the Australian Energy Market Operator (AEMO) temporarily suspended some of the solar and wind energy projects. The dwindling supply of electricity forced the AEMO to take this decision. With rising power bills and looming risks of a blackout, most people could face harsher conditions in the Australian winter.

However, the government has recognised the urgent need to prevent Aussies from the ongoing crisis. The government’s plan of action includes several parameters, ranging from rebate programs to supply boosting measures.

Some people have taken matters into their own hands and have started to generate their own electricity via residential solar panels. These solar panels have become a common source of power generation over the recent years, providing some relief from the shooting electricity prices. However, the population depends on the national electricity grid, and so, the soaring electricity prices have become one of the  government’s top concerns in the current scenario.

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Several measures have been taken by the central and state governments to ensure that Australians are not locked out of the energy supply mechanism. Let us now discuss a few such measures introduced by the government:

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Focusing on renewables

The Labor government has promised to find a solution to the ongoing crisis as soon as possible. In fact, the Anthony Albanese-led Labor government has been quite vocal about the country’s shift to renewable energy.

While the government has negotiated with the gas providers to increase the supply, it has not ruled out the possibility of facilitating a drastic shift in the way electricity is supplied across Australia. However, Australia’s power grid needs an upgrade to become compatible with renewable energy. Meanwhile, it seems imperative that fossil fuel extraction should be approved based on merit. Energy Minister Chris Bowen is also participating in discussions to seek solutions for the prevailing energy crisis.

Slashing prices

The government has offered to cut electricity bills by AU$275 per year, a promise made by the Labor party during its election campaign. The government pledged to slash power bills after the Australian Energy Market Operator (AEMO) took over the power grid to guarantee supply.

The AEMO has also triggered the Gas Supply Guarantee Mechanism for the first time since it was introduced in 2017. The measure was taken to secure gas for power generators and ward off a potential shortfall in southern states.

Proposing a capacity mechanism

The government has also proposed a "capacity mechanism" that makes existing coal and gas power plants eligible for extra peak period payments, provided they guarantee capacity in the electricity grid. A draft plan has been prepared by the Energy Security Board of regulators, which says that the scale of investment to retain the reliability of supply over the coming decades is dramatic.

Coal-fired power plants and renewable energy providers would be eligible for payments under the proposed plan. Critics argue that this plan could delay a move to a low-emissions electricity system.

Introducing energy support payments

  • Utilities allowance: The utility allowance can be availed by those who claim the Disability Support Pension and are younger than 21 years with no dependent children. Single individuals receive AU$170.30 per quarter, and those in a couple receive AU$85.15 each.
  • Centrepay: Those who receive Centrelink payments can arrange for regular amounts from their payments to be transferred to pay their EnergyAustralia bill. The Centrepay service can be availed to conduct the same.
  • Support offered by states: State governments have offered a range of benefits for consumers-

 


 


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