Market Review: Completed
Overview
On 21 December 2018 the Australian Energy Market Commission published its annual Residential Electricity Price Trends report. This is the ninth residential electricity price trends report prepared by the AEMC at the request of the Council of Australian Governments’ (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, and nationally, from 2017-18 to 2020-21. The report examines wholesale electricity purchase costs, regulated network costs and environmental policy costs. By focussing on 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, representative residential electricity prices and bills are expected to decrease over the period from 2017-18 to 2020-21, primarily due to decreasing wholesale costs, driven by 9,732 MW of new generation and battery storage entering the national electricity market.
The downward pressure this new generation creates on wholesale prices more than offsets expected increases in coal and gas prices over the period.
The decrease in wholesale costs more than offsets slight increases in network costs and increasing environmental policy costs primarily due to the Small-scale Renewable Energy Scheme (SRES).
The ACT, Western Australia and Northern Territory are exceptions to this national trend, with electricity prices and bills expected to increase slightly over the period.
See the Price Trends microsite
For further information contact Andrew Pirie on 02 8296 7867, Mike Bradley on 02 8296 7868 or Prue Anderson on 02 8296 7817.