Media Contact
Carl Kitchen 0401 691 342
Jul 23 2018

Electricity price spike caused by generator closure: Independent report

The independent energy regulator has found that recent sharp increases in electricity prices were caused by the closure of the Hazelwood power station last year.

An independent review of the wholesale electricity market by the Australian Energy Regulator found that the withdrawal of 1600MW of generation in Victoria had a number of knock on effects which increased wholesale prices in Victoria, NSW and SA.

Australian Energy Council Chief Executive Matthew Warren said the AER’s report supported the explanation given by the industry over the past year.

“The AER placed the response of generators under the microscope following the loss of a major low-cost power station.

“A key finding of that monitoring of wholesale prices before and after the closure of Hazelwood was that the recent rises were driven by the need to replace the lowest cost dispatchable plant with higher cost black coal and gas generation.

“The offers generators made to the market before and after the closure of Hazelwood were largely unchanged, with some gas-fired plants actually offering capacity at lower prices than they had previously.

“The AER did not find any abuse of market power, withholding of capacity or shift to offering higher prices for the same capacity.

“Ultimately, higher priced generation had to fill the supply gap and set the price more often, which is unsurprising when a large, cheap generator leaves the market.”

About the Australian Energy Council

The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

Related News


Report shows solar continues to shine

Australia's love of solar continues to grow with the latest data showing people are going bigger when to comes to getting rooftop solar.

May 06 2021

Energy Council statement on Andrew Reeves

The Australian Energy Council is saddened to learn of the loss of Andrew Reeves, the former chair of the Australian Energy Regulator.

May 05 2021

Response to the ESB’s Post 2025 Market Design Options Paper

The Australian Energy Council has welcomed the release of the Energy Security Board's options paper,which is the result of a substantial consultation process.

Apr 30 2021
Do you have a question or comment for AEC?

Send an email with your question or comment, and include your name and a short message and we'll get back to you shortly.

Call Us
+61 (3) 9205 3100