Power prices fall as mild summer, renewables reduce generation costs

Power prices will fall for hundreds of thousands of people from July 1 as energy generation costs continue to fall.

The default market offer for NSW households will fall by $102 a year, $116 in South Australia and $53 in south-east Queensland.

Retail power prices are set to fall following a determination by the Australian Energy Regulator to reduce the default market offer for NSW households by $!02 a year. Credit:Paul Rovere

The Default Market Offer is a cap on prices retailers can charge customers. While many retailers also have cheaper deals, there are 727,000 electricity customers on a standing offer in NSW, Queensland and South Australia who will benefit from the rate reduction. Victoria is not covered by the determination and sets its own default market offer.

The reduction comes on the back of falling wholesale electricity costs, which make up around a third of household energy bills. In Victoria, wholesale prices fell 68 per cent, from $79 per megawatt-hour in the first quarter last year to $25/MWh for the same period this year. NSW prices fell 55 per cent over the same time, from $86/MWh to $38/MWh.

The Australian Energy Market Operator said a mild summer, combined with increased rooftop solar, resulted in the lowest demand across the national energy market in the first quarter of a year since 2002.

“In the last quarter, we’ve experienced less price volatility, an increased volume of low-priced coal and hydro generation and a 29 per cent increase in wind and solar generation, all contributing to lower wholesale prices,” AEMO chief markets officer Violette Mouchaileh said.

The low demand and volatility in the market have also reduced demand for gas-generated power this quarter, representing the lowest figures since 2005.

AEMO’s report also showed electricity emissions from the national energy grid fell 9 per cent year-on-year to register the lowest figure for the first quarter, totalling 31.5 million tonnes of carbon dioxide equivalent.

Energy Minister Angus Taylor said “low energy prices will help drive our economic recovery by boosting the spending ability of households and businesses”.

Energy Consumers Australia, representing customers, said reforms driven by the federal government and Australian Energy Regulator, were contributing to lower power bills. However, chief executive Lynne Galagher said customers can source better deals, the default offer remains well above median prices and customers should remember they can shop around.

Australian Energy Council chief executive Sarah McNamara, who represents energy retailers, said only 9 to 12 per cent of household customers were billed via the default market offer, largely because “retailers offer much cheaper deals to customers who shop around, rather than settling for the price set by the regulator”.

“Getting a cheaper deal is easy – speak to your retailer or use independent comparisons through the government’s Energy Made Easy website,” Ms McNamara said.

Start your day informed

Our Morning Edition newsletter is a curated guide to the most important and interesting stories, analysis and insights. Sign up to The Sydney Morning Herald’s newsletter here, The Age’s here, Brisbane Times’ here, and WAtoday’s here.

Most Viewed in Politics

From our partners

Source: Read Full Article