Market Review: Completed
On 13 December 2013, the AEMC published the 2013 Residential Electricity Price Trends report.
This report is the fourth annual residential electricity price trends report prepared by the AEMC at the request of the Standing Council on Energy and Resources.
The report sets out, in broad terms, the drivers of price movements and trends in residential electricity prices for each state and territory of Australia over the three years from 2012/13 to 2015/16. These drivers and trends are also consolidated to provide a national summary. There is a reasonable degree of variability between the states and territories that underlies the national summary.
The possible future price trends presented in this report are not a forecast of actual prices but rather a guide to what may drive prices, based on current knowledge, assumptions and legislation.
The drivers of price trends are based on trends occurring in the competitive wholesale and retail market sector, the regulated network sector, and resulting from government environmental policies.
Generally, residential electricity price increases are expected to moderate over the next three years. This national trend is largely driven by:
- stabilising regulated network costs; and
- upward and downward pressure from the costs of different government environmental policies, including the cost of the carbon price and closed premium solar feed in tariff schemes.
Competitive wholesale and retail market costs are expected to remain relatively stable.
For the first time, our report considers both trends for standing and market offer prices. Our analysis of trends in market offers covers Queensland, New South Wales, Victoria and South Australia.
In these states, residential consumers are able to shop around for the best offer from retailers. Depending on where consumers live and their electricity consumption, they may have saved between 5 and 16 per cent by switching from a standing offer to a market offer in 2012/13.
On 23 May 2013 the AEMC published the terms of reference for its 2013 Residential Electricity Price Trends report. A copy of the terms of reference is available below.
The Standing Council on Energy and Resources has requested the AEMC to undertake these price trend reports on an ongoing, annual basis.
In 2013, the AEMC was directed to deliver a report which examines electricity price trends for the years 2013/14 to 2015/16, with 2012/13 to be used as a base year for comparison.
The 2013 Residential Electricity Price Trends report is different from previous years, as the AEMC is required to cover both standing offer and market offer price trends. This year's report also considers different levels of consumption by residential consumers and the likely impact on average prices.
The report provides information on both standing and market offer prices, expressed as a single “average” nominal cents per kilowatt hour (c/kWh) value (GST exclusive). This is based on a representative set of residential consumers for each state and territory.
As in previous years, we also provide a breakdown of the relevant supply chain cost components that contribute to residential retail electricity prices. These are also expressed as a nominal c/kWh value for each state and territory.