Market Review: Completed
On 25 November 2021 the Australian Energy Market Commission published its annual Residential Electricity Price Trends report. This is the twelfth annual residential electricity price trends report prepared by the AEMC at the request of the ministerial forum of Energy Ministers (formerly COAG Energy Council).
The report identifies changes in the energy supply chain cost components that are driving residential electricity prices and bills for each Australian state and territory (excluding the Northern Territory and Western Australia), and nationally, from 2020-21 to 2023-24 (the reporting period). By focusing on trends in the cost drivers of prices and bills, the report helps to focus attention on key sectoral issues.
The pricing and bill outcomes in this report do not constitute specific pricing and billing forecasts. Actual price movements will be influenced by how retailers compete, the dynamics of wholesale spot and contract markets, the outcomes of future network regulatory decisions, and changes in policy and legislation.
On a national basis, overall residential electricity prices and bills are expected to decrease despite increasing slightly in 2022-23. This trend is primarily driven by wholesale costs reducing in most of the states and territories in the first year before increasing in the second reporting year following the closure of Liddell power station in New South Wales. Wholesale costs are expected to fall markedly over the whole reporting period as new capacity enters the system.
Regulated network prices are expected to increase in response to increases in distribution and transmission costs. Environmental costs are being driven down by cheaper large-scale generation certificates for increasing levels of renewable generation.
Australian Capital Territory is the exception to this national trend, with electricity prices and bills expected to increase over the period.
For further information contact David Russell on 04 3430 7012.