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Power prices are forecast to fall in most Australian states and territories over the next three years, with energy users in Queensland set to see the biggest benefit.
Key points:
- Forecasts released by the Australian Energy Market Commission predicts electricity prices will fall in all states and territories except the NT and WA
- The AEMC says further investment in batteries, wind and solar will generate the "optimal mix" to meet power needs at the lowest cost
- Falling distribution costs and cheaper large-scale generation certificates under the Renewable Energy Target are also contributing
Official forecasts published by the Australian Energy Market Commission (AEMC) show the continued price falls are primarily driven by increasing supplies of primarily renewable energy generation in the electricity market.
The advisory body predicts further investment in batteries, wind and solar as an "optimal mix" of generation investment to meet power system needs at the lowest cost to consumers.
No new investment in gas or coal generation is forecast beyond projects already committed.
The report forecasts South-East Queensland electricity prices will fall by 20 per cent by June 2022 — a saving of $278 on the annual bill of a representative household customer.
New South Wales prices are tipped to fall overall by 8 per cent ($107), Victoria by 5 per cent ($53), ACT by 7 per cent ($134), Tasmania by 5 per cent ($93) and South Australia by 2 per cent ($27).
Prices in Western Australia are estimated to rise by 6 per cent, or $102 in Western Australia by 2022, mainly due to increased gas costs.
The AEMC was not provided with enough information to adequately forecast price changes in the Northern Territory.
Projections are not certain
John Pierce, the AEMC's chairman, said the forecasts reflected a significant injection of nearly 5,000 megawatts of new power supply across the country over the next three years.
"More supply puts downward pressure on prices," he said.
"But it's important to note that over a decade of analysis we have seen trends change sharply in response to factors such as sudden generator closures and implementation of new policies.
"As such, all price projections should be seen as just that, projections."
While the new generation is the biggest driver of the forecast price drops, falling distribution costs and cheaper large-scale generation certificates under the Renewable Energy Target are also contributing.
According to the AEMC's report, committed new generation includes 2,338MW of solar, 2,566MW of wind and 210MW of gas turbine power.
The government advisory body also modelled a further investment in 15,55MW of battery power, 1,553MW of wind power and 372MW of solar power to meet the market's needs.
Topics: electricity-energy-and-utilities, consumer-finance, solar-energy, energy, australia
First posted