Between ongoing overseas conflicts, wild weather and election season promises, the energy market continues on to be a sore spot for business operators and private citizens alike. Joel Gibson from the consumer advocacy group One Big Switch has reported tariff increases from 43 per cent to 285 per cent as energy retailers respond to a surging wholesale market.
Underlining much of it is the increasingly desperate hustle to bring cheaper renewable energy sources and storage into Australia’s future, while maintaining demand as costly and polluting power stations are closed over the coming years.
Energy Australia’s chief executive Mark Collette shared "Looking back at the first part of the energy transition over the last 20 years, Australia did pretty well, with up to 30 per cent renewables [with] a couple of significant power station closures.
"That was the easy bit. Looking forward, the next bit is hard."
Let’s dive into the state-wide particulars for this month’s Energy Update:
Surprising no Victorian, power prices across the state have increased 100 - 120% in the last six months, an average of 20% per month. With no fall expected, this trend could continue into the foreseeable future, with increases of around 35% anticipated. Surprisingly, despite this increase, Victoria remains one of the most cheaper states in the country.
For small businesses, the results are a little more mixed bag, with most rising 10 - 20%, but some receiving up to 100% increases due to retailers going under.
In the lead up to November’s election, the Labor government has announced a major upgrade to the state’s energy network, aiming for a 95% reliance on renewables by 2035, with a 65% goal by 2030.
With this is a promised return to the State Electricity Commission returning to public ownership, with taxpayers holding a 51% stake.
New South Wales
Similar to Victoria, NSW has seen an increase of around 120% in the last six months, anticipating the same 35% cost jump in 2023. The difference, however, remains in the eye watering increases NSW has experienced since our August Update, with prices skyrocketing amongst extreme weather and anticipated power station closures.
The NSW Electricity Infrastructure Roadmap has begun with the first of a 10-year schedule of rolling tenders kicking off, aiming to deliver 12 gigawatts of renewable energy by 2030, and 2 gigawatts of long duration energy storage, much needed as four out of five of the state’s coal-fired power stations are scheduled to retire in the next 11 years.
If recovering from (or preparing for) flooding rains yet again wasn’t enough, Queensland continues to look down the barrel of yet another teeth-gritting price increase. Seemingly in a head-to-head race with NSW to see who can have the most expensive wholesale electricity costs, Queensland too has risen 120% in costs over the past six months.
September saw the announcement of a $62bn plan to replace coal by 2036 with 25GW of large-scale wind and solar farms, transmission lines and two pumped hydro plants for storage. Premier Mick De Brenni said at the time “We should expect there to be some continued elevation of wholesale electricity prices, that’s likely to flow through to retail bills,” he said, adding Queensland could shield households “in a way that no other state on the east coast can”. Watch this space for what this will mean next.
Continuing to quietly succeed, Tasmania continues to benefit from a favourable Feed-in Tariff (FIT) for commercial and residential solar, with energy costs on par with Victoria. Newcomer to the state is Aurora Energy, offering further competition to the market. We especially recommend small businesses get in touch about FIT benefits and optimisation.
The Victorian, Tasmanian and Commonwealth governments have finally reached a funding deal to build the Marinus Link, a second underwater electricity interconnector. This allows access to Tasmania’s Battery of the Nation renewable energy projects, an outcome that may see a slight rise in network charges, but a lowering of energy prices by more than $100 per year for residents.
So, what should you do?
While present evidence shows a continuing increase in costs, the long-term forecast into 2024 is less dire as the market finds its footing after many years of volatility and change. Connecting with your dedicated Choice Energy specialist is the best way to understand your unique circumstances, and create a strategy that allows you to prevent harm today, while allowing you to be open to opportunities to save in the future. Contact your broker today. If you are new to Choice Energy call on 1300 304 448 to start the journey, or send us your latest energy bill here.