Axing energy tariffs would cut electricity costs

MORE reforms to energy tariffs are needed to cut the cost of electricity across the country and prepare for changing energy markets, the Energy Supply Association of Australia has argued.

The ESAA on Tuesday released a review of residential electricity tariffs, which found no tariffs in place "optimised equity, efficiency, simplicity and transparency".

It essentially found the raft of tariffs on power supply would not be able to cope with changes in the energy market, new technologies for delivering electricity or changes in power demand in the coming years.

Chief executive Matthew Warren said the current tariffs were designed in the 1960s and '70s, well before the mass purchases of air-conditioners in the past 30 years, which have driven peak power demands.

"Australia's electricity system has undergone significant change in recent years," he said.

"And it's likely to keep on changing with new technologies like storage, smart thermostats and electric cars in the future.

"That's why we need to reform the way we pay for the systems that supplies our electricity."

Mr Warren said no matter what technologies evolved, the tariff system needed to be brought up-to-date to cope with such changes.

"As we saw with the recent heatwaves, air conditioners use large amounts of electricity, often for only a few hours a day," he said.

"They have forced significant spending on electricity networks to meet these load 'spikes', which is paid for by everyone, not just the installers of air conditioners."

He said the increased use of air conditioners across the country meant some households were paying extra to make up for those using more energy.

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