Green Guilt

Australia today set out on a path towards a low-carbon economy, with the government announcing a set of measures intended to force Australian businesses to transition their energy supply to renewable sources. As a consumer of energy, I’m not insulated from the impending energy cost increases. I expect that one way to insulate oneself from these increases would be to make the switch to renewable energy as soon as it becomes affordable enough to do so. Right now, I can transition to 100% wind-power for an additional 5.5c per kWh, which is not unaffordable. My only question is this: the logical paths for pricing of the two available energy sources should be inversely correlated. As conventional electricity pricing increases, market availability of renewable sources should as well, leading to lower prices. Therefore, 5.5c per kWh now should be as expensive (per CPI) as it should ever be. Origin Energy alludes to this in their FAQ on the subject:

Why does GreenPower cost more?

Power from renewable sources is currently more expensive than traditional generation such as coal fired power stations. This is partly because the renewable energy industry is still emerging and does not enjoy the same economies of scale as traditional power and production.

I wonder if this will really be the case… or if it’s just a cynical opportunity to cash in on green guilt?