Energy savings for customers can be as big as a 20% saving on your electricity bill, a leading energy retailer says.
Natural gas and renewable energy companies, including AGL, BP and Shell, have been spending billions of dollars to reduce costs, and some are promising big gains from cutting their own bills.
However, some analysts are warning of a backlash against the new tax, with some analysts predicting that the bill will push up energy bills even further.
Here’s what you need to know about natural gas and renewables tax.
What is the new energy tax?
The new energy taxation regime introduced by the Turnbull government is expected to cut emissions from the energy sector by more than 30% by 2040.
This will be achieved through a number of measures, including the abolition of the carbon tax, a reduction in emissions from fuel combustion and other energy sectors.
The Government also wants to cut Australia’s energy bill by more the equivalent of one of the following:1.
$1.4 billion in revenue over the next two years from new taxes on gas, coal, oil and gas.2.
$6.5 billion over the period from 2020 to 2040 from other energy taxes, including:3.
$3.2 billion over 2020-2021 from a carbon tax on coal4.
$2.3 billion over 2021-2022 from a new fuel tax on gas5.
$9 billion over 2023-2024 from a levy on oil and coal6.
$5 billion in 2020-21 from other excise taxes, such as the carbon price and stamp duty7.
$7.3 million in 2020 from an excise tax on petrol8.
$8.6 million over 2021-2023 from an electricity rebate program for electric power users9.
$11.2 million over 2020 from other direct tax cuts, such a gas rebate program10.
$15.4 million over 2019 from the reduction in fuel excise tax11.
$16.5 million in 2018 from a cap on the price of gas and other fossil fuels in the Australian dollar12.
$20.8 million in 2017 from a tax on the use of carbon offsets13.
$26.2 to $28.2 for the 2017-2018 financial year14.
$33.2 in 2016-17 for the 2018-2019 financial year15.
$37.9 million in 2015-2016 for the 2016-2017 financial year16.
$45.6 to $50 million over the 2018 financial year17.
$55.8 to $60 million over each of the 2019-2020 financial years18.
$65 million over 2018-19 and 2019-20 financial years19.
$70 million over 2021 and 2022 financial years20.
$75 million over 2024-25 and 2025-26 financial yearsThe new tax will apply to households, businesses and institutions, with the highest rate in the energy and mining sectors.
What are the impacts of the tax?
Energy savings from the new regime will amount to a 20-year reduction in Australian electricity bills by at least $1,400, according to the Australian Energy Market Operator.
The change will increase the cost of electricity to consumers and businesses, but will also have a greater impact on the environment because it will be more expensive to produce, transport and store electricity, the ANZ’s Andrew Whitehead said.
Energy bills will be higher for businesses, with a higher increase in the cost to energy consumers, according the ANAO.
The cost to households will increase by between $1 and $1 billion, with an average annual increase of between $5 and $7 per household, the agency said.
But the cost increases for businesses are lower, as electricity prices will be less expensive for their employees, and businesses will save money on the cost for maintenance and repairs, according ANZ figures.
What other countries have done to encourage energy efficiency?
Other countries have seen dramatic reductions in their energy use as a result of the CO2 emissions reduction.
In the United States, energy use dropped by over 20% between 1970 and 2012.
The US government has announced plans to reduce CO2 from vehicles, aircraft and power plants by 25% by 2030.
Australia, which has the largest number of coal fired power stations in the world, has also reduced its use of fossil fuels.
In China, coal-fired power plants have been shut down for safety reasons and carbon dioxide emissions have been reduced.
In Germany, where electricity demand is the highest in Europe, carbon dioxide levels have dropped by up to 40% in the past 15 years.
Germany has also implemented a carbon price, which means it will only pay a fixed price for carbon pollution for a certain period of time.
The government in the UK announced a 20%-40% reduction in energy use by 2030, with plans to achieve the reduction by 2030 and beyond.
Energy efficiency is also on the rise in Australia.
The Australian Energy Regulator estimates that an energy efficiency