Power to the people: towards a publicly owned electricity grid
The Greens will seek to return the national electricity grid into public hands, starting with the vital interconnectors between regions.
The policy will help bring down electricity prices and help cut pollution by ensuring better planning and investment to underpin a clean energy future.
The Greens also want to secure Australia’s energy independence with a publicly owned grid that will underpin the shift to electrified transportation throughout the economy.
Much of the current electricity grid is privately owned by large overseas companies, including a company registered in the Cayman Islands, as well as investment arms of other governments. Up to 50% of an average electricity bill is due to network charges.
Despite operating in a market that is low-risk and regulated, network companies have been allowed to charge excessive expenditure with unacceptably high rates of return.
A return to complete public ownership can ensure investment decisions are made in the public interest, not in the interests of profit. Returns can be reinvested in the energy transition and not sent overseas to line the pockets of big for-profit companies.
The Greens will begin the transition to return the electricity grid to public ownership by requiring the Commonwealth to acquire privately owned interconnectors. The estimated cost of acquiring the five privately owned interconnectors is $2.8 billion.
The Greens also want to see Commonwealth investment in new interconnection between South Australia and NSW to strengthen the grid and underpin new investments in renewable energy zones. Transgrid have estimated the cost of building a new interconnector between South Australia and New South Wales at approximately $500 million. The Greens would have the government build and own a new SA-NSW interconnector. The Greens would call for input on further interconnection between Queensland and the south-eastern states.
Gradually, through the means outlined below, the Greens will seek to transition privately owned transmission infrastructure in NSW, Victoria and South Australia back into public ownership. The Greens will continue to fight the privatisation of the networks in Queensland and Western Australia. Similarly, distribution networks would be brought into public ownership by negotiation over time.
While Section s 51(xxxi) of the Constitution clearly indicates the Commonwealth has the power to acquire property on just terms, the Greens will seek the return to public ownership to be accomplished cooperatively. The first step will be to reduce the guaranteed rate of return offered to network companies to at or close to the government bond level. There can be no justification for making consumers subsidise essentially risk-free investment in networks at rates of 6-7% when government can borrow at rates of closer to 2.5%. This will save consumers millions of dollars. If network companies no longer wish to operate at these more reasonable levels, they will be invited to sell their assets back to government at an amount reflective of the new rate of return. Recent changes to the limited merits review for Australian Energy Regulator decisions in relation to networks will also assist this process.
This policy applies to the distribution and transmission components of the National Electricity Market. The Greens have recently released policies for the other parts of the network: in generation, the Greens would increase the Renewable Energy Target; in retail, the Greens would reregulate prices.
Quotes attributable to Adam Bandt MP, climate and energy spokesperson:
“It is time to return power to the people by putting the electricity grid back in public hands.
“The current system is a rort designed by and for big corporations. Instead of using public funds to build our network more cheaply and efficiently, customers are forced to bankroll the profits of big corporations, Cayman Islands companies and the investment arms of other governments.
“Big corporations front up to the regulator, ask for a 7% return to build and maintain poles and wires when the government could do the job at 2.5% and the regulator then ticks it off and makes consumers foot the bill.
“Network companies are responsible for 97% of all blackouts, like the ones we just saw in Victoria, yet governments turn a blind eye and blame renewables instead.
“Standing up to Cayman Islands companies and putting the grid back in public hands will mean lower power bills. We will have a rationally planned network where investments are made in the public interest and to cut pollution, not in the interests of overseas shareholders and fossil fuel companies.
“We need a power grid for the 21st century that can underpin the transition to renewables and electrified transport. This means lines out to new renewable energy zones in places that have great sun and wind but no current connection to the grid. If we leave it up to big corporations seeking only to maximise their profit at public expense, renewable energy zones won’t happen.
“We will start the move to full public ownership with the acquisition of the privately held interconnectors. As we’ve seen in recent times, these are vital pieces of national critical infrastructure that underpin the reliability and stability of the grid and they should be run for public benefit.”
“It’s time for Labor and Liberal to finally admit that privatisation of the grid has been a failure. Labor state governments need to stop whinging about this neoliberal nightmare they helped create and work with the Greens to put the grid back in public hands.”
“The Greens also want to see Commonwealth investment in new interconnection to support the growth in renewables and create a truly national grid. We would start by connecting South Australia and NSW enabling South Australia renewables to help power NSW, which is increasingly vulnerable from unreliable coal.”