What Australia and the European Union can learn from each other

Sangeetha Chandrashekeran, David Ritter, Dylan McConnell, Johanna Cludius, Viktoria Noka,

Credits: Shutterstock

Some are concerned that decarbonization of the power sector may mean higher prices as the transition to clean energy progresses. And high prices can lead to energy poverty. If the household cannot afford the basic electrical services needed for a decent standard of living, such as heating.

Our new reportCompare the EU and Australia’s approach to affordable energy energy released today.

EU Soaring energy prices Demand increased as part of the post-COVID economic recovery and constraints on gas supply from Russia. In Australia, wholesale electricity prices reached unprecedented levels in 2018, After declining..

It turns out that Australia can learn a lot from the EU about implementing policies to mitigate. Energy poverty.. It also shows that, with proper regulation and market settings, electricity prices can be reduced when the electricity sector decarbonizes.

Apples and oranges?

Why compare a large, populous coalition of member states with Australia? The EU and Australia have important similarities in the energy sector, such as the vast grid across jurisdictions and shared governance arrangements.

Both are experiencing an influx of renewable energy supplies (although this is more policy-driven in the EU than in Australia). And EU member states such as Australian states and territories are ultimately responsible for energy regulation within their boundaries.

So with adjustment Governance. Energy reduction involves obtaining consensus between jurisdictions.

The EU has adopted a more tuned top-down regulatory approach to the affordability of energy than Australia. There are lessons that can be learned from the EU, but there is no cut-and-paste solution.

What is the driving force behind your electricity bill?

Well, it’s complicated. The introduction of low-cost renewable energy supplies over the last decade has eased both wholesale and retail electricity prices. Europe When Australia.. This may continue in the short to medium term.

However, adding renewable energy to the grid requires upgrading the poles and wires that carry the power, which is costly. In addition, low wholesale prices facilitate the early withdrawal of aging coal-fired power plants and need to be managed to avoid price shocks.

Energy poverty in the climate crisis: what Australia and the European Union can learn from each other

EU stocks do not match up to 100%. The rest is supplied by nuclear energy, but not shown here.Credits: Sangeeta Chandra-Shekeran, author courtesy

Australia can learn from the EU in this regard. Here, almost all member countries, such as France and Germany, have announced. schedule Coal will be phased out. They often set requirements and define plant closure dates.

This is not yet standard in Australia, as was recently seen last week in Origin Energy’s surprising decision to accelerate the closure of Australia’s largest coal-fired power plant, Eraring.

Australia’s electricity system has more restricted interstate interconnections compared to most parts of the EU’s electricity market (although this is Start to change). This means that in Australia, shocks such as premature factory closures are less likely to be absorbed.

Both the EU and Australia are working on ways to distribute the costs of network upgrades fairly and efficiently across society.This includes Germany, which has electricity stakeholders. Discussing A method of evenly distributing grid costs nationwide without burdening areas with high renewable energy generation.

If you want to raise money for an upgrade by increasing the use of the grid, such as more electric vehicles and heat pumps, this will distribute the cost to a wider base.

Australia’s energy poverty

Determining which households spend the most on energy is energy inequality. justice.. There is a big difference between Australia and Europe.

In Australia, the average household spends much less on electricity and heat (2% of the household’s disposable income) than the EU’s corresponding household (6%), as can be seen in the graph below. I am.

In both Australia and the EU, low-income households spend most of their income on electricity and heat, but consume much less.

However, this variance is more pronounced in Australia. gain The last 10 years. This means that low-income households are being disproportionately affected by rising energy prices, which requires coordinated efforts to address them.

Policy to deal with energy poverty

Focusing on alleviating energy poverty Policy issues Within the EU, the European Commission does it Fair energy conversion..

Energy poverty in the climate crisis: what Australia and the European Union can learn from each other

Credits: Sangeeta Chandra-Shekeran, author courtesy

There are various regulations and systems Dedicated Deal with it. European Commission “Renovation wave“For example, the policy is a major refurbishment plan focused on low-income social housing, which provides long-term support for vulnerable households on a scale not yet seen in Australia.

The EU also provides clear information to member countries guidance How to define, measure and address energy poverty. Multiple compound measures are used instead of a single metric. This includes absolute energy consumption, unpaid utility bills, and self-reporting that the house cannot be kept warm.

The EU also funds the following institutions: Energy Poverty Observatory And new Energy Poverty Advisory HubTo better understand the nature of energy poverty.

Still, the translation of EU ambitions into member states is uneven, for example Bulgaria performing far worse than Spain. The seriousness of the problem does not necessarily lead to national policy efforts.

Australia does not have a comprehensive national framework for energy conversion that includes the principle of equity and leaves no one behind.

In Australia National power target It guides the market plan. However, they do not mention fairness or decarbonization. Energy poverty remains a concept without a clear definition, and therefore there is no clear purpose, goal, or metric for data collection, nor is there an agency to monitor and report on it.

Energy “hardship” or “stress” is a more general term, and Australia has a well-established term. Consumer protection framework.. It focuses on reducing costs through concessions, retailer obligations, and protection against possibilities. electricity Disconnection.

Whatever language you use, Australia can learn from the European experience of developing a consistent definition, metrics, and an independent body for reporting on energy difficulties.

There are also lessons from Australia to Europe related to the rapid deployment of rooftop solar meters and smart meters.

In this rapid development, Australia is at the forefront of tackling new consumer protection issues. This includes addressing unfair cost allocation and barriers to market participation, and changing rules to address provider’s new responsibilities in a changing energy environment.

Australia also has good examples of industry-led efforts for affordable cultural change. for example, Energy Charter Is a national CEO-led collaboration that addresses customer-centric principles, including: energy Affordable.

This can be effective and long-lasting, with corporate support, large and small businesses, and the involvement of a strong community.

Australia’s largest coal-fired power plant closed

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What Australia and the European Union can learn from each other

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