How renewable electricity is lowering NSW power prices

The price of electricity is substantially down for a second year running, in part due to NSW residents embracing this particular renewable.

Sydney electricity prices have fallen another 7 per cent since July, new data reveals, as cheap renewables push down the cost of wholesale power.

The latest decline in tariffs follows an even bigger ­reduction last year.

New data from St Vincent de Paul, which has been tracking bills since at least 2011, shows average bills are now hundreds of dollars lower than when charges peaked between 2012 to 2014.

“You are seeing lots and lots of renewables coming in and that’s driving down wholesale prices,” St Vinnies executive manager of policy and research Gavin Dufty said.

Vinnies’ findings are supported by draft research from NSW’s independent Pricing and Regulatory Tribunal.

Supplied News Recent changes in NSW power prices. Source: IPART

IPART recently estimated prices had fallen by 5 per cent in 2021 to levels not seen since 2015.

“The influx of renewables has reduced electricity retail prices,” IPART said. “The growth in household solar systems has driven down wholesale prices in the middle of the day, leading to lower average wholesale and retail prices over the past two years.”

According to the CSIRO, Australia has the highest uptake of solar globally.

About 380,000 systems were installed last year alone — the fourth annual record in a row. One in four homes now has panels on their roof.

Origin Energy’s head of retail Jon Briskin said Australians had embraced rooftop solar like nowhere else in the world.

“Our sunny climate, rapidly falling system costs and attractive government incentives have combined to help drive exponential growth in installations over the past decade,” Mr Briskin said.

Other people are taking different forms of action to save money and help the ­environment.

Renewables supporters Alex Harrison and Alexandra O’Neill with their beagle Chico. Picture: Richard Dobson

Last year, solar panel salesman Alex Harrison moved to little-known power retailer Nectr, which only offers plans that are 100 per cent carbon neutral or entirely sourced from green energy.

“We’ve never had lower bills than we do now,” Mr Harrison, of Waterloo, said. “So now I think the question is, why wouldn’t you do it?”

Vinnies’ annual tariff-tracking report will be offici­ally released next week but Mr Dufty revealed that the headline figures were a 7 per cent drop in prices since July in the Ausgrid and Endeavour distribution areas, which cover all of Sydney as well as the Illawarra, Central Coast, Newcastle, Blue Mountains and the Southern Highlands.

There had been a 4 per cent fall in the Essential distribution area, which accounts for the rest of NSW.

Last year’s tariff-tracking report showed a 9 per cent ­decline in prices in the Ausgrid patch, 8 per cent in ­Endeavour’s zone and 6 per cent in Essential’s.

Mr Dufty said ASX futures markets were pricing in further reductions in NSW wholesale prices through 2025. That is also the case in other states.

Despite the fall in the cost of power, some households’ recent bills have been getting bigger due to increased consumption during Covid lockdown.

Sources said the pandemic was also a factor in declining wholesale prices, as business demand dropped.

Originally published as How renewable electricity is lowering NSW power prices