Market Review: Completed
The Australian Energy Market Commission (AEMC) has published its 2017 Residential Electricity Price Trends report. This report is the eighth annual residential electricity price trends report prepared by the AEMC at the request of the Council of Australian Governments (COAG) Energy Council.
This report provides an overall picture of factors driving electricity prices for households in each state and territory of Australia from 2016-17 to 2019-20. The report examines wholesale electricity purchase costs, regulated network costs, and environmental and system security policy costs.
Price trends identified in this report are not a forecast of actual prices. They are a guide to factors which may drive prices up or down. Actual prices will be influenced by how retailers compete in the market, the outcomes of network regulatory processes and changes in government legislation. Actual consumer bills will be affected by all these drivers, as well as customers’ individual consumption choices, and local factors like the weather and where they live.
On a national basis, residential electricity prices are expected to decrease by an annual average of 6.2 per cent from 2017-18 to 2019-20. The trends in residential electricity prices largely reflects falling wholesale costs in 2018-19 and 2019-20, driven by expected new generation (approximately 4,100 MW across the national electricity market), the return to service of Swanbank E generator (385 MW in Queensland) and reduced short-run costs for South Australian gas plants due to the state’s Energy Security Target.
The Northern Territory, ACT and Western Australia are exceptions to this national trend. In the Northern Territory and Western Australia the trends are increasing prices over the reporting period. In the ACT, prices rise until 2018-19 and then decrease in 2019-20.
Trends in the underlying supply chain cost components and drivers of trends will vary across jurisdictions and over time. This reflects differences in population, climate, consumption patterns, government policy and other factors across the states and territories. The way these trends affect an individual consumer will depend on how that consumer uses electricity.
For further information contact Andrew Pirie at 02 8296 7867 or Shari Boyd at 02 8296 7869.