Confirmation of overcharging by our large generators is another wake-up call for the Government, the Sustainable Electricity Association said today.

“It is difficult to have confidence in our electricity system and it raises huge concerns over the design of the market,” said SEANZ Chairman Brendan Winitana in commenting on the commerce Commission report into the use of market power by the generator-retailers.

"If ever there was a time for fresh thinking it is now. Clearly, the electricity market has failed to put the brakes on the exercise of market power by the large players. Consumers and the wider economy have paid a hefty price for that failure.”

SEANZ promotes small scale renewable energy. This involves small power sources located within or close to homes and businesses.

“We have said for a long time that there are simple steps the Government can take on the demand side of the market as one set of answers to the problem.

“We support the use of Feed in Tariffs (FITs), a common tool used in dozens of countries overseas including Australia which encourages consumers to generate their own power.”

FITs require a power company to pay a premium above market rates to consumers with their own power sources. The cost is spread over all consumers.

“This is a win-win. Consumers get a faster payback on their investment in solar or wind power and the environment is better off because more renewable energy is generated. What’s more, overseas experience shows that FITs encourage local manufacturers of wind turbines and solar PV. In these difficult economic times that is a great benefit.

“The potential is vast. A UK report from last year suggests that with the right incentives such as FITs, by 2030 British households and businesses could generate as much electricity a year themselves as five nuclear power stations and save 5 per cent of the carbon emissions produced by electricity generation. The Guardian 3 June 2008

“We are not saying FITs are the only answer, but if the Government wants quick results, they are a sensible and simple step to take as the design work has already been done in many countries.

“Now is the time for innovative thinking and bold action, not mere tinkering with the current market,” concluded Mr Winitana.