Tas Liberals promise to break from national electricity market to reduce power prices
Posted
The Tasmanian Liberals have promised to reduce power prices by up to 10 per cent if re-elected in March by breaking ties with the National Electricity Market (NEM).
Tasmania began operating in the NEM in 2006 when the Bass Strait electricity cable Basslink was activated.
The state's electricity pricing structure is linked to that of Victoria which was seen as the most competitive market, and was locked in to be used as a benchmark.
But it means Tasmania's energy pricing is affected by volatility in the Victorian electricity market.
Last year the then energy minister Matthew Groom agreed it did not make sense.
Premier Will Hodgman has announced if re-elected his government would break Tasmania's link with the NEM.
Mr Hodgman wants to ensure the state is not exposed to higher costs caused by power station closures or system failures interstate.
He said "With Tasmania charging toward 100 per cent energy self-sufficiency ... now is the time to take back our competitive advantage and break away from inflated mainland prices, and to drive down the cost of living of Tasmanians."
He said Tasmania would still export and import power across Basslink but it would exit from being linked with Victorian pricing.
"This is a win/win situation ... a lower power price for Tasmanians, whilst still selling power at higher prices into the NEM."
If re-elected the Liberals will break the link with the NEM by mid 2021.
Until then it is promising power prices will be capped at CPI.
Mr Hodgman said the move, coupled with hydro upgrades and new windfarms at Granville Harbour and Cattle Hill, would see electricity prices drop by 7 to 10 per cent by 2022.
