Industry experts say Australia is on the ‘precipice’ of energy crisis

Industry experts have warned Australia is on the “precipice” of an energy crisis akin to the UK as the wholesale energy market faces dire price rises.

Industry experts have warned Australia is on the “precipice” of an energy crisis akin to the United Kingdom as the wholesale energy market faces dire price rises.

Chief executive at ReAmped Energy Luke Blincoe warned customers had little time to act before retail prices escalated further.

Wholesale electricity prices have soared by a whopping 141 per cent in 2022 alone.

ReAmped this week told customers it is in their best interests to switch to another retailer as soon as possible to get a cheaper price.

“The wholesale energy market has just become so extreme that we’re now seeing a situation where wholesale prices are above retail prices,” Mr Blincoe said.

“So, unless you’re a generator, there is simply not a sustainable position in the retail marketplace.

“We‘re saying to our customers ‘the best way we can save you money is actually ask you to switch away’. And now is the opportune time to do that while there are still some deals available.”

According to Mr Blincoe, customers are now facing a doubling of prices from July.

In the UK, skyrocketing prices have seriously affected those on lower wages already struggling to make ends meet, as inflation and the general cost of living continues to eat into budgets.

“It‘s too far to say it’s in crisis right now, but there’s reason to be very concerned,” he said.

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Australia is on the precipice of an energy crisis, analysts warn.

“I think we are on the precipice now and if these wholesale prices hold for much longer, I think there‘s reason to be very concerned.”

Bruce Mountain from the Victoria Energy Policy Centre said ReAmped‘s predicament was an all-too-familiar story for smaller energy companies who are struggling to compete with Aussie heavyweights like AGL, Origin and Energy Australia.

“I‘m very worried about what this means for the retail market,” Professor Mountain said via the ABC.

“The small retailers … they perform a vital role in our market in bringing competition and innovation and new ideas.

“If it wasn‘t for them, the big retailers would face much less competition and they’d charge even more and customers would get an even worse service.

“So, I‘m very worried about these smaller companies – they’re facing a very tough time.”

Professor Mountain said it was too early to describe the issue as a “crisis”, but warned consumers to be wary.

“It‘s too far to say it’s in crisis right now, but there’s reason to be very concerned,” he said.

“I think we are on the precipice now and if these wholesale prices hold for much longer, I think there‘s reason to be very concerned.”

ReAmped Energy has about 70,000 customers across NSW, Queensland, Victoria, South Australia and the ACT.

Customers were sent an email telling them to consider switching plans. Some admitted they didn’t believe it at first and thought it must have been a joke or scam.

The bold move comes days after the Australian Energy Regulator raised benchmark prices for retailers, which means households across the country will face higher bills from July 1.

ReAmped Energy this week told customers it is in their best interests to switch to another retailer as soon as possible to get a cheaper price.

AER attributed the increases to significant rises in wholesale electricity costs over the past year.

ReAmped Energy chief executive Luke Blincoe said it was an “incredibly volatile time” for the energy market and the company’s policy had always been to be honest.

“Several retailers have already started to pull up the drawbridge so customers need to act fast to get themselves onto a better deal now before it’s too late,” he said in a statement.

“There are still a handful of competitive deals in market. No one really knows how bad it will get so we want people to act now.”

It came as Treasurer Jim Chalmers warned of “skyrocketing inflation” set to hit Australians.

“This perfect storm of energy price spikes is doing enormous damage to our employers, to our households and to our national economy,” he said.

“There are far more troubling aspects in our economy: skyrocketing inflation is a big challenge.”

Mr Chalmers said the Coalition‘s government’s failed energy policies were in part to blame for the price surge.

“These are the costs and consequences of almost a decade now of a government, with 22 different energy policies, failing to land the necessary certainty to improve the resilience of our energy markets,” he said.

“This is the chickens coming home to roost when it comes to almost a decade now on climate change and energy policy failure from our predecessors.”

Originally published as Industry experts say Australia is on the ‘precipice’ of energy crisis