Call me a cynic but I suspect the trigen bloke moved from the UK because the Brits are running out of gas while Australia has plenty for now. I look forward to the writeup. Gas powered air conditioning strikes me as odd especially if your office is next to the hot chimney. Some are tipping future baseload power stations in NSW will be combined cycle gas. I'd like to know whether trigen will reduce that need and what kind of percentage split there will be between distributed and centralised generation.

Very ironic that off-grid power is suddenly off the agenda in NSW...
What hope now that we'll ever get to Centralised Solar (sigh!)?

The coal-fired skeptics over at The Australian are already smirking.

Power Blame Game Heats Up

By Annabel Hepworth and Imre Salusinszky

THE states face pressure to wind back schemes that pay households to generate electricity using rooftop solar panels.

This comes after NSW slashed its scheme in the wake of a surge in installations that threatened to add $2.5 billion to power costs by 2016.

As Wayne Swan lashed NSW for a "profound" failure to invest in its electricity infrastructure and said this had driven "very savage" increases in power prices in the state, the Keneally government cut back the payment to households producing electricity from solar panels - or, in some cases, wind turbines.

Premier Kristina Keneally attributed the blowout in the scheme to the "windfall" gains participants experienced as a flood of cheap imports from China and Spain caused the cost of solar panels to halve since last year.

Ms Keneally did not resile from the fact that NSW - unlike all the other states - operated a "gross feed-in tariff" that paid households for all the electricity they produced, not simply the excess electricity that they returned to the grid.

The unanticipated uptake has sent the cost of the scheme - recouped by electricity retailers from all customers - skyrocketing from an estimated $1.5bn over the six-year life of the scheme to about $4bn.

Ms Keneally was unwilling to say how much the scheme had pushed up the cost of power for the average household, but said the figure would be between $80 and $130 a year if the scheme were not pared back.

"What we are doing today is slowing down the scheme in order to stop any further impact on electricity prices," Ms Keneally said.

The move sparked immediate demands from the energy industry for other states to review "overly generous" feed-in tariff schemes.

It has also added to pressure for the Gillard government to review its subsidy, known as "solar credits", which works by multiplying the number of renewable energy certificates (RECs) created from solar panels. The RECs are generally purchased by energy retailers, who pass on the costs.

Energy Supply Association of Australia chief executive Brad Page said: "We remain firmly of the view that these excessively generous feed-in tariffs and solar bonus schemes only result in expensive abatement and higher bills for under-privileged groups.

"This should serve as an important precedent for other states to review and take similar action to foreshadow the closure of these schemes as expensive and inappropriate arrangements."

He said the federal household-level solar scheme "will just deliver higher costs to consumers" for little emissions reduction.

Nationwide, consumers have rushed to install photovoltaic panels on their rooftops to take advantage of generous subsidies - including federal subsidies worth $6200 in most capital cities and $6800 in Darwin.

The states have introduced solar feed-in tariff schemes to increase the levels of renewable energy and create "green jobs".

The NSW scheme will be cut from 60c/kWh to 20c/kWh. Victoria's scheme pays 60c/kWh, but it is a "net" scheme - meaning it only covers the power returned to the grid - and in gross terms this equates to 39c/kWh. Queensland's scheme pays 44c/kWh net, equating to 28.6c/kWh gross.

Critics say the schemes are inflating power prices and delivering subsidies from average customers to those who have installed the panels.

On Monday, national economic data on wholesale prices for the September quarter showed a jump of between 6 per cent and 13 per cent across the states for power prices, while water bills had risen between 7 per cent and 17 per cent.

Julia Gillard this week blamed a sustained period of under-investment for skyrocketing energy prices. The Prime Minister's comments inflamed tensions with the states, which have rolled out an array of their own greenhouse abatement schemes in the absence of a federally mandated carbon price.

West Australian Premier Colin Barnett said Ms Gillard's criticism was "a bit strange".

He accused her of making "wild statements" and not understanding "the history of energy reform in Australia".

"Julia Gillard is proposing a carbon tax," Mr Barnett said.

"Now a carbon tax will mean electricity prices will go up by whatever amount the carbon tax is . . . That's not reform; that's high cost on consumers."

The Treasurer said yesterday there were "very savage" increases in NSW and "a profound lack of investment".

NSW Energy Minister Paul Lynch last night countered: "Over the last 10 years, $10 billion has been spent on electricity infrastructure. To say this is under-investment strains the meaning of the plain words of the English language."

Mr Lynch said that the proportion of consumers' bills that related to network charges was effectively set by the Australian Energy Regulator.

The NSW government's move comes five months before an election and amid a concerted campaign on power prices by Sydney's The Daily Telegraph. Household power bills in NSW are set to rise by up to 42 per cent over the next three years.

Ms Keneally also promised a review into network costs - which comprise 40 to 50 per cent of a typical bill - headed by Australian Energy Market Operator chairman Tom Parry and bureaucrat Mark Duffy.

The review would examine "to what extent there is scope for softening or easing the pressure on prices", Dr Parry told The Australian.

He said he wanted to avoid "the risk of policy-induced fuel poverty".

The Australian Manufacturing Workers Union slammed the cuts to the solar bonus scheme, while the Clean Energy Council said the move would cost jobs and damage confidence in a "clean industry".

The current scheme closed at midnight last night, with home owners who have already purchased panels given a further 21 days to sign on at 60c per kWh.

Mark McCorkindale, a database administrator from Naremburn on Sydney's north shore, swooped on the scheme in its original form.

With the solar panels installed at his home just two weeks ago, he considers himself "one of the lucky ones". The financial case for turning to green power had been compelling, he said.

When the scheme was explained, "I was like, 'It's too good to be true. I'll pay it off in three or four years. Where do I sign?' ".

If he had a concern, it was only that the federal and state schemes had prompted many new installers to flood the market and he didn't know who to choose.

"You don't know who's good and who's dodgy," he said. "You've got to go by word of mouth. And thankfully, I got lucky again."

Distributors, manufacturers and installers of the panels fear the bottom is falling out of the industry. Danin Kahn, the chief executive of Sydney-based Todae Solar, a solar panel provider, warned that the state government was creating a "boom or bust" cycle by effectively tripling the payback period for customers.

"We've built up resources, put on staff, bought stock, found the right people, and now the government pulls it back overnight," he said. "At 20c they may as well have closed the scheme altogether. There's no incentive."

Additional reporting: Drew Warne-Smith, Paige Taylor

(Disclosure: Cretaceous uses 100% Greenpower.)