South Australia has the highest power prices in the world

ANALYSIS of power prices in Europe has found prices in one Australian state are the highest in the world.

SOUTH Australia now has the most expensive electricity in the world providing a powerful incentive for households to install solar systems.

Carbon and Energy Markets director Bruce Mountain crunched the figures and found South Australia’s power is three times more expensive than in the US and 50 per cent higher than the UK.

He told news.com.au he compared prices in South Australia and other parts of Australia to countries in Europe.

“I know the most expensive prices are in Europe, US prices are much lower and the only other contender is Japan but I know prices are higher in Europe,” he said.

Dr Mountain said he had previously done more comprehensive audits of prices around the world including the US. His analysis includes consideration of gas and electricity prices for the average customer.

It found prices in South Australia were more expensive than in places like Denmark, Germany, Italy, Ireland and Portugal. Other states were also expensive, with NSW featuring the 5th highest prices and Queensland the 7th.

South Australia Treasurer Tom Koutsantonis has challenged the calculations saying they were based on old data and “fundamentally flawed” assumptions.

But Dr Mountain said the data from Europe was the latest available and there was no reason to believe the latest data would be different. He said the Australian data was based on current prices.

South Australia has been at the centre of debate around renewable energy after experiencing a number of blackouts amid the closure of coal-fired power stations and a shortage of gas that has driven up prices.

One South Australian plastics factory has already made the decision to close its doors after 38 years in operation, because of higher costs and soaring electricity prices.

Dr Mountain said the problems in South Australia had built up over a long period of time.

“It’s due to a combination of factors,” Mr Mountain said of the high prices. “Most of them rooted in inadequate policy and implementation of policy over a long period of time so I’m not singling out the current state government.”

Dr Mountain said he thought one of the reasons why power prices in the state were so high was due to energy companies charging inflated prices for use of the “poles and wires”. He said concentration of power had also undermined competition in the wholesale market and another factor was how difficult it was for consumers to compare prices among retailers.

“As the chief executive of AGL said, we have a market that penalises loyalty,” Dr Mountain said.

In a report released last month, the Australian Energy Market Commission found about 70 per cent of people were not shopping around for the best deals on their power bills, even though this could save some household $507 a year on electricity (38 per cent). Gas savings could add up to 30 per cent or $285 a year.

Concern over high prices has also seen Prime Minister Malcolm Turnbull summon electricity bosses to Canberra for a meeting on Wednesday to “eyeball” them about their charges.

Owner Stephen Scherer will be closing the doors of his business, PGS Plastics due to the raising price of electricity. Picture: MATT LOXTON

Power prices in some states increased by up to 20 per cent in some states from July 1 and the Australian Competition and Consumer Commission is currently investigating energy prices in Queensland, NSW, Victoria, South Australia, Tasmania and the ACT, amid accusations of price gouging by retailers.

Meanwhile, new analysis show payback periods for solar and battery systems has dropped to about seven years in some states including South Australia.

Solar Choice, a rooftop solar comparison and brokerage service, calculated average payback costs for solar and battery storage this month based on the current price hikes for electricity prices. It found Perth had the fastest payback rate taking into consideration tariff rates and system costs. It was followed by Brisbane and Adelaide.

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