19 July, 2024
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Welcome to the ACT – where energy prices are actually falling


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Pockets of Australia are avoiding bill shock by being ahead of the nation on solar and wind power.

As the bigger eastern states face soaring energy costs, electricity prices in Canberra will decrease, the territory’s economic regulator announced this week.

Senior commissioner Joe Dimasi said the ACT was the only jurisdiction in the national electricity market where regulated tariffs would decline in 2022/23.

The ACT is the first jurisdiction in Australia to make the transition to 100 per cent renewable energy, helped by an economy that lacks gas-dependent manufacturing and heavy industry.

“In August 2015, I committed the ACT to achieving 100 per cent renewable electricity by 2025. We got there ahead of time in 2020,” ACT Chief Minister Andrew Barr tweeted.

“One of the results of this policy ambition, and accelerated delivery, was on display today.”

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The average ACT business customer using 25,000 kilowatt-hours of electricity would see a decrease of $88 in their annual bill, the regulator said – while across the border in NSW electricity bills are rising fast.

Locking in long-term renewable energy contracts had more than offset the current spike in wholesale electricity costs, the ACT regulator said.

Federal Resources Minister Madeleine King told the ABC on Tuesday that coal-fired power stations needed to come back online to help ease the energy crisis.

But that’s not the answer, according to analyst Johanna Bowyer at the independent Institute for Energy Economics and Financial Analysis.

She said solutions included government support for an “orderly exit of increasingly unreliable coal generators”.

Improving the energy efficiency of households and accelerating the building of renewable energy, storage and transmission were also recommended.

In the meantime, domestic gas users could be protected from high international prices by redirecting a small proportion of exports to the domestic market, Ms Bowyer said.

Marija Petkovic, founder and managing director at market intelligence firm Energy Synapse, said Australia needed to urgently put politics aside and get on with building more renewable energy and storage to reduce its reliance on fossil fuels.

Economist John Quiggin said the fastest way to increase Australia’s energy supply was a rapid increase in installations of solar panels with battery backup.

“In the medium-term, this should be complemented by the expansion of wind energy along with the enhanced transmission network promised [by Labor],” he said.

Labor’s election pitch included bringing cheaper renewable energy to Australian homes and businesses, with power bills to be cut by $275 a year for homes by 2025.

Energy analyst Tristan Edis said addressing poor energy efficiency in rental properties would be a way to lower energy bills “reasonably quickly and permanently for those that really need help”.

Australia’s quarterly agricultural overview released on Tuesday pointed to the far-reaching effects of high energy prices on global supply chains, noting that these costs were also driving increased food costs.

“For agricultural producers, higher energy prices are being felt through rising fertiliser prices, as natural gas is a primary input into its production,” the federal government’s overview said.

David Leitch, principal at market services firm ITK, said rain, high international commodity prices, ageing coal generators and winter were all pushing electricity prices up.

“Electricity prices have risen firstly because La Niña has disrupted NSW and Queensland coal supply,” he said.

“The coal supply shortages, power generator break downs, coal prices at five times historic levels and seasonally weak renewable energy, has increased demand for gas by 15 per cent of normal east coast demand.

“The good news is that when the rain stops and spring comes things will improve a bit.”

Federal Energy Minister Chris Bowen will meet state and territory counterparts on Wednesday to weigh up options to address the energy crisis.


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