National energy crisis explained: The reason you are paying the price for power bungles

Everyone was left shocked and confused by this week’s power supply crisis, but why is it happening and will it continue?

It’s the “national embarrassment” that threatens to leave customers with soaring power bills and blackouts – and has left many of us bewildered as to how it got so bad, so quick.

Depending on who you ask, it’s all because of a lack of spending on renewables, being too quick to abandon coal and gas, the war in Ukraine, the unreliability of coal-fired power plants during a cold snap, power generators desperate to make profits, polarisation in the energy debate and delays in Snowy Hydro 2.0 construction.

One thing is for sure – there is no quick and easy answer and no sign of the crisis easing soon, with warnings it will happen again in a hot summer.

Consumer groups have called for the Australian Competition and Consumer Commission to step in to ensure customers are not left out in the cold.

Energy Consumers Australia CEO Lynne Gallagher said: “In the short term we want to see the price monitoring introduced by the ACCC be even more dynamic and responsive, so that there is real pressure for pricing transparency in the moment, when prices and events are moving fast”.

Ashlie Stevenson, 66, who is having to use her heating very sparingly at home. Picture: Tim Hunter.

“We’d also like to see the reintroduction of the statement of expectations by the Australian Energy Regulator.

“During the pandemic the statement imposed obligations on retailers to avoid disconnecting households and small businesses who were unable to pay their energy bills and to offer payment plans to assist them. Such measures would be extremely helpful now, given the pain that we know consumers will be facing.”

Ms Gallagher also said power generators needed to be more clearly incentivised to keep supplying electricity in times of need and the Australian Energy Market Operator has the ability to compel them to do so “without unnecessarily alarming consumers with warnings of blackouts”.

She also said there should be a major initiative to better insulate millions of Australian homes, lessening the amount of electricity we will then need to heat and cool them.

Peakhurst’s Ashlie Stevenson said she has been using her heater “very sparingly”.

“High prices have meant since the cold snap I use the heater only on the coldest nights,” the 66-year-old said.

Rasko Linen Services owner Peter Raskopoulos said the company’s gas bill has tripled and they may be forced to pass on higher prices to the hotels, nursing homes and hospitals that they serve. “We need to ensure power supply otherwise businesses like ours simply can’t operate,” he said.