Labor will de-link Tasmania from the Victorian wholesale energy price if it is elected, but energy analysts say the policy may not put downward pressure on power prices and could stifle renewable development.
While the Liberals plan to exit the National Electricity Market entirely by 2022, Labor wants to ensure that energy prices are linked more closely to Tasmania’s cost of production.
Labor Leader Rebecca White said this would lead to lower power prices for Tasmanians.
“What we would do is create a new mechanism where we link our cost of energy production of Hydro, which is one of the lowest in the whole country,” she said.
“We'd start to do that within the first 12 months of a Labor government.”
Labor will also move to establish a target of generating 120 per cent of Tasmania’s energy needs from renewables, which, Ms White says, would improve the case for a second interconnector.
Goanna Energy consultant Roman Domanski said it was “a little bit hard to see” how Tasmanians were going to get major benefits out of Labor’s proposed changes to the state’s energy landscape.
“A lot of the initiatives are aimed at things like developing more renewables,” he said.
“There seems to be less focus on actually delivering benefits, lower electricity prices to the average [customer] in Tasmania or even to the average small business.”
Economist and energy analyst Phil Bayley said Labor’s policy, like the Liberals’ planned NEM exit, could have a “serious impact” on new investment in renewables.