Dec 14 2016

Electricity Price Volatility To Continue Without National Plan

Electricity prices are rising and will remain increasingly volatile without a clear national energy strategy, the energy industry said today.

The Australian Energy Council’s Chief Executive, Matthew Warren, said wholesale prices were being driven higher as older power stations closed and were not being replaced because of chronic uncertainty over national energy policy.

The Australian Energy Market Commission’s latest assessment of residential electricity price trends has highlighted generation costs as a key factor driving higher energy bills.

“The biggest cost increases are occurring in South Australia and Victoria, where we have seen older power stations close without being replaced. At the moment the electricity system isn’t transforming, it’s just degrading.

“Fewer generators supplying the same demand is increasing costs. The new investment that would normally be signalled by higher prices is stalled by a decade of policy uncertainty. No one knows what is going to happen next.

“In this environment continued uncertainty is driving up power bills. It is difficult to see how this will substantially change until we provide sufficient confidence to the energy market so that we can begin re-building the system.

“The longer we delay an agreed national strategy, the more we can expect price volatility and supply reliability to be compromised.

“The challenge of integrating more large-scale renewables, forced into the grid by arbitrary state-based targets, will continue to escalate in the absence of a broader, integrated approach.

“The efficiency and operation of the National Electricity Market is now rapidly being undermined. Urgent action by national policymakers, with the support of their state counterparts, is required.”


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.

Media contact             Carl Kitchen                0401 691 342

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