Survey reveals Australians are worried about the transition from coal power
70% of households feel they are getting value for money for their electricity, but many are not confident about the end of coal, Energy Consumers Australia finds
Nearly three-quarters of Australians are concerned the country will not have plans in place to replace its ageing fleet of coal power plants when they reach the end of their lives, a survey of more than 2,000 households and businesses suggests.
The results are part of Energy Consumers Australia’s regular study of what the community thinks about the rapidly evolving electricity system as it moves from running predominantly on fossil fuels to a majority solar and wind grid.
Now in its sixth year, the survey – described as the country’s most comprehensive ongoing examination of its kind – found a rising level of satisfaction about power bills. A record 70% of household consumers said they felt they were getting value for money when paying for electricity. This was 13 points higher than a year ago and up from just 34% in December 2017.
But there was significant concern over whether the system would be effectively managed to prepare for the closure of coal plants in the years ahead, with 72% of households and 74% of businesses surveyed expressing unease.
Lynne Gallagher, Energy Consumers Australia’s chief executive, said the increase in satisfaction in electricity prices followed a fall in wholesale energy prices from historic highs.
The drop has been linked to the influx of renewable energy, which has increased competition in the market and, according to experts, is increasingly making coal plants economically unviable. Governments and regulators have also introduced policies aimed at lowering power prices.
But this “explicit shift” in sentiment has not been matched by increased confidence about the future.
Gallagher said consumers were hearing a confusing story about the future of energy that included the use of hydrogen, technology roadmaps, a government commitment to “technology, not taxes” and the need to invest more in transmission infrastructure.
She said what they were not hearing was how this would work for them to ensure an affordable electricity supply, rather than just benefit big energy and transmission companies.
“What they seem to be hearing is risk, complexity and competing views,” Gallagher said. “It‘s just a natural response.”
Asked to identify the two most important issues to consider as the electricity system changed, 56% of survey respondents nominated having affordable prices, 40% a transition to renewable energy to help prevent climate change and 35% to invest in new technologies to replace old coal and gas plants.
Avoiding electricity outages, promoting energy independence and reducing the amount of energy we use were considered less important.
Gallagher cited a British energy white paper released in December, Powering our net zero future, as an example of how concerns about the future could be addressed. The paper explains why the government is backing ambitious greenhouse gas emissions targets – including a 68% cut by 2030 compared with 1990 levels – and what it would do to keep prices down and support the most vulnerable.
Gallagher said a similar approach that spoke directly to consumers was needed in Australia. “Consumers are not mugs,” she said. “People know there is a lot of uncertainty, people know we haven’t been here before, but you need to show how it will work.”
The federal and state governments are frequently at odds over the future of electricity, with the Morrison government having dropped plans for an overarching energy policy and promised a “gas-fired recovery” from the Covid-19 pandemic and several states – notably, NSW, Victoria and Queensland – having stepped in to underwrite or fund the expansion of support renewable energy. The Energy Security Board, which reports to federal and state ministers, is considering options to redesign the national electricity market.
Gallagher said people could increasingly take steps to help take control of their energy costs, including by installing solar panels and better insulation and buying smart home energy systems. But that did not apply to everyone, and policies needed to apply to the growing cohort renting and living in apartments.
It could be addressed through minimum efficiency standards for rental properties and mandatory disclosure of energy efficiency for all properties. She said making this fair for all, including landlords, was complicated and the Morrison government was working on the issue, but there was “perhaps not a sufficient sense of urgency”.
She said the pandemic had shown retailers benefitted when they proactively helped consumers by helping them identify when they were having trouble paying bills and moving them on to hardship or payment programs.
“We are seeing now that when you treat consumers this way they respond by increasing their trust in the system and the actors in it,” Gallagher said. “Just because we are hoping the pandemic will soon end does not mean that putting consumers first should end also.”
The survey found about 60% of households and businesses said they were worried there could be frequent electricity outages in 10 or 20 years time. About 70% said they were concerned that the energy system would “fail to keep up with the changing way in which we use energy”.
But the proportion of consumers who said they were confident the electricity and gas markets were working in their long-term interests was increasing – up 10 and seven percentage points over the past year to 46% and 52% respectively.