Windfall profits to Australia’s dirtiest power stations
We’re paying them to pollute!
A new report commissioned by Environment Victoria has found that Australia’s dirtiest coal fired power stations are making windfall profits from ‘compensation’ payments designed to offset the impact of the carbon price.
The federal government designed the Energy Security Fund to ensure energy security and prevent asset value loss for brown-coal fired power stations that were to be most impacted by the carbon price. The package was worth $5.5 billion.
However, this new report shows generators have been passing on more than the full cost of the carbon price to customers, and are set to make between $2.3bn and $5.4bn in windfall profits from the compensation in coming years. The compensation is actually increasing the profit margin of the dirtiest power stations in the country – we’re paying them to pollute.
Environment Victoria strongly supports the carbon price, and recognises the positive impact is it already having on behaviour and investment decisions. However the compensation package is now holding the carbon price back from doing its job, and must be removed.
Environment Victoria is calling on the government to commit to review and remove the Energy Security Fund to be undertaken in the lead up to the federal budget and ahead of the next scheduled compensation payments of at least $1bn on 1 September 2013.
Read the full report Transitional assistance or windfall profits? The financial impact of the carbon price and compensation payments on Victoria’s brown coal generators >
For a full explanation of Environment Victoria’s position, what this means and what we’re going to do about it check out this blog from our Safe Climate Campaign Manager >