Household electricity bills forecast to fall
Household electricity bills are tipped to fall by an average of $97, as the markets reap the benefit of new generation and the falling cost of renewable energy generation.
The Australian Energy Market Commission’s electricity price trends report forecast mixed results across the country.
Over the three years to 2022 NSW electricity prices are expected to shrink by 2.8 per cent each year, delivering a cumulative $108 reduction to an average household bill.
Victorian consumers are set to save $53 over the next three years, with an annual average price drop of 1.6 per cent.
South east Queensland electricity prices are set to fall by 20 per cent overall, delivering a cumulative $278 saving. Price falls of $27 are expected in South Australia, $102 in Western Australia, and $95 in Tasmania.
Several factors are putting downward pressure on prices. Around 5000 megawatts of new generation has entered the network, including significant renewables investment, while demand has remained flat.
The cost to retailers of the compulsory purchase of renewable generation, under the Large Scale Renewable Energy Target, is coming down as solar, wind and hydro power generation become more cost effective.
AEMC chairman John Pierce said while the analysis pointed to price falls across the grid, there was no guarantee things would go to plan.
Australia’s ageing fleet of coal-and-gas-fired generators can be unpredictable. Origin Energy this week delayed the return to full capacity for its Mortlake power.
“More supply puts downward pressure on prices. But it’s important to note that over a decade of analysis we have seen trends change sharply in response to factors such as sudden generator closures and implementation of new policies. As such, all price projections should be seen as just that, projections.” Mr Pierce said.
Energy and Emissions Reduction Minister Angus Taylor said the price fall forecast showed that the Morrison government’s energy plans were working.
The government had introduced a range of levers to lower energy prices and increase reliability of the electricity grid, Mr Taylor said.
“The ‘big stick’ legislation, Retailer Reliability Obligation, the Grid Reliability Fund and the Underwriting New Generation Investments program are all designed to put downward pressure on wholesale prices and deliver more reliable power to the grid to ensure the reliable, 24/7 affordable power that Australian families and businesses deserve.”
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