Market Review: Completed
On 11 December 2014, the AEMC published the 2014 Residential Electricity Price Trends report.
This report is the fifth annual residential electricity price trends report prepared by the AEMC at the request of the COAG Energy Council.
The report provides information on the supply chain components expected to affect the trends in residential electricity prices for each state and territory of Australia over the three years from 2013/14 to 2016/17. By providing information on the drivers of potential future movements in prices, the report seeks to strengthen consumer engagement in the electricity market.
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 prices are expected to be stable over the three year period after falling in 2014/15 due to the removal of the carbon price. For the final two years of the period, upward pressure on prices results from government environmental policies, while growth in regulated network costs and wholesale energy costs are expected to be subdued. Price trends and drivers vary between states and territories due to local conditions and government policies.
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 7 and 16 per cent by switching from a standing offer to a market offer in 2013/14.