AEMC electricity price trends finds SA power bills will increase next year then fall

Cheap renewables are driving down electricity prices, but there’s a sting in the tail – it’s costing more to get power to the people. Here’s how much you’ll have to fork out.

Household power bills will go up $86 next financial year, then fall again, a report by the Australian Energy Market Commission says.

Cheap renewable energy and reductions in environmental levies have brought prices down by $142/year over the past three years but extra costs of the network will increase prices in 2022-23.

Prices will then trend down again in 2023-24, according to the report published on Thursday.

South Australia was “at the forefront of the renewables revolution” and the costs of generating electricity would fall even as the state’s older gas-fired power stations close, AEMC chair Anna Collyer said.

“Integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers,” she said.

Anna Collyer, chair of the Australian Energy Market Commission.

The report says prices for the average SA household using 5000 kilowatthours a year are expected to increase by $86 from $1684/year this financial year to $1770, then dip down again to $1707. SA prices peaked in 2017-18 at $1889 according to the commission.

Ms Collyer stressed the report was a guide to trends not a precise prediction of actual prices.

The increase in network charges did not include Project EnergyConnect, the $2.3bn transmission line to NSW.

“The increases are from business-as-usual investments to make sure the network is safe and secure,” Ms Collyer said. “The more significant expenditure will be further into the future and customers won’t be affected until that point.”

The commission expects the Torrens Island Power Station and Osborne to close but new wind farms and the Snapper Point gas-fired plant to come online.

Federal Energy and Emissions Reduction Minister Angus Taylor welcomed expected overall falls in prices across three years in all jurisdictions except the ACT.

Closure of many coal plants emphasised the importance of Snowy 2.0 and a gas-fired plant in the Hunter Valley, he said.

The AEMC report follows annual price analysis by the Essential Services Commission of SA for the SA Government which was published in August.

Using different methodology from the AEMC’s, that analysis found average prices down $35 since 2016-17, the baseline for the Government’s election promise to cut bills by $302/year.

Prices were down $303 since the peak in 2017-18, ESCOSA reported.

The ESCOSA report looks back at previous years while the AEMC report looks at trends ahead.

Ms Collyer urged consumers to shop around for better deals, especially the 8.7 per cent of households on standing contracts rather than market offers who could easily save $270/year.

The AEMC sets the market rules and advises governments.

Originally published as AEMC electricity price trends finds SA power bills will increase next year then fall