Torrens Island power station at dusk.
Torrens Island power station at dusk.

Power prices are about to come down... but not for all of us

 

THE brutal rise in electricity prices rocking household budgets this year will halt mid-2018 with the start of an average 12 per cent fall.

That's the national trend analysis of the Australian Energy Market Commission which monitors and enforces the rules covering power generation.

Its findings released today pointed to a dive in prices over the next two years, thanks to the increased use of relatively cheap renewable energy.

But the AEMC warns the closure of coal-fired generators could mean they will go up again, taking consumers on a electricity price rollercoaster.

And not everyone will benefit from lower costs.

In Queensland prices rise an estimated 3.4 per cent but are expected to fall by 7.1 per cent.

In NSW they rose 10.2 per cent and could fall by an average of 6.6 per cent a year over two years.

In South Australia the 2017 rise was estimated at 17 per cent and the expected fall 7.3 per cent.

In Victoria the rise as 15.9 per cent and the expected fall 8.2 per cent. In Western Australia the rise was 10.9 per cent and the reduction anticipated to be 6.3 per cent.

In Tasmania the rise was two per cent and the decline is expected to be 6.5 per cent.

However, the territories miss out on the price cuts enjoyed by the states.

In the ACT the 2017 rise was 20.3 per cent and from 2018 there will be a rise over two years averaging 1.8 per cent.

In the Northern Territory the rise was 0.5 per cent and the next two years will see further increases of 2.5 per cent.

"On a national basis, prices rose almost 11 per cent this year, but with extra supply in the market, we estimate this will be offset by a 12 per cent fall over the following two years," said the AEMC in a statement.

"But we still need governments to develop new policies so these reductions can last, because right now consumers are on a power price rollercoaster.

"We know more wind and solar supply will help bring prices down, but old power stations are starting to close down, which means supply will drop and prices go up again.

"Without investment in replacement dispatchable capacity, wholesale prices will go up again and remain volatile. And the rollercoaster will be repeated."

Torrens Island power station at dusk.
Torrens Island power station at dusk.

Australia's power network is becoming cleaner with the use of new technologies such as giant batteries, but the market has not adapted.

The AEMC said wind and solar power works differently to traditional generation like hydro, gas and coal and if it's not managed correctly the result could be "more system instability and blackouts".

"Prices rose sharply this year by almost 11 per cent on a national basis as consumers felt the impact of Hazelwood and Northern coal-fired plants retiring and the lack of replacement investment, combined with high gas prices," AEMC chairman John Pierce.

"But we expect these price rises will be reversed over the next two years as around 4000 MW of Renewable Energy Target-funded wind and solar generation enters the system."

Labor leads the Coalition on a two-party preferred vote by 53 per cent to 47, representing a national swing against the Government of three per cent, the last Newspoll for the year shows.

The poll of 1669 voters across the country, conducted exclusively for The Australian, shows the Coalition has made no ground in the past two weeks with Labor maintaining a one point primary vote lead of 37.

The poll conducted over the weekend shows the major parties have not shifted since the last poll held between November 30 and December 3. The Greens remained steady on 10 per cent while One Nation dropped a further point to seven per cent.

Prime Minister Malcolm Turnbull maintained his narrow lead over Opposition Leader Bill Shorten as preferred prime minister, lifting two points to 41 per cent while the opposition leader lifted a point to 34 per cent.



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