SYDNEY—Origin Energy Ltd is considering buying wind farms, and says a shift to renewable energy sources could potentially push electricity bills up by 20 per cent.
Origin Chief Executive Grant King said Australia's second biggest energy retailer would consider bidding for wind farms put up for sale by the Queensland Government.
"... We will certainly look at that," Mr King told ABC television.
Origin currently offers wind and solar products to its customers but has to buy the energy from other suppliers.
Wind farms are generally much more highly geared than Origin's balance sheet, Mr King said.
"So whether we put them on our balance sheet or let them sit on someone else's balance sheet is a capital structure issue and an efficiency of capital issue."
The Federal Government plans to launch a carbon trading scheme in 2011, and is expected to set an emissions target and a carbon price some time next year.
Mr King agreed a carbon price of $20 to $30 a tonne would make coal expensive enough to trigger a shift to natural gas.
But for a shift to renewables, Mr King said a carbon price of $50 to $60 would be required, and that would imply a hefty price increase for customers.
"Off the top of my head ... you're talking perhaps around a 20 per cent increase in prices at a consumer level," he said.
Whether or not such a high carbon price is needed will not be known until the Government sets an emissions reduction target, Mr King said.
And he warned that the Government risked making the pricing situation worse if it took too long to set a target.
"It's always important to remember that every question about the price of carbon needs to also have answered: `What is the target, what are we shooting for'".
"The deeper the cut, the greater the cost.
"And the clear economic consequence to that is to move sooner, because the sooner we move, the less deep we have to make future cuts."
A number of prominent business leaders, including the head of Origin's biggest rival AGL Energy Ltd, have criticised the Federal Government for waiting until at least next year to set a carbon trading price.
Mr King doesn't think Australia should aim to get all of its energy from renewable sources, but should use a combination of coal, natural gas, renewables and nuclear.
"I think the important thing is to stay technology neutral," he said.
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