Blog

Australians are warned to brace for significant power bill hikes as a new report reveals prices in the country’s electricity market have surged to their highest ever levels, and there’s no sign that they’ll slow down.

The Australian Energy Market Operator said in their quarterly report that wholesale gas prices soared to “unprecedented average levels” in the three months to July.

There are early indications that will continue to rise this quarter, likely to impact millions of Australians’ household and business bills.

Deputy Prime Minister Richard Marles said the government would seek to ramp up getting more renewables into the electricity grid to produce cheaper power.

“We’ve made it very clear we’re going to act on climate change in a way which gets more renewables into the electricity grid,” he told the Nine Network.

“The real thing now is that renewable power is cheap power, and then we’ll see electricity prices come down.”

The AEMO report revealed the quarterly average national electricity market spot price was $264 per megawatt-hour, triple the $85/MWh during the same period in 2021.

In the gas market, AEMO posted a record average price of $28.40 a gigajoule in the second quarter, compared with $8.20/GJ for the same period last year.

The market operator said international factors – namely the sustained Russian invasion of Ukraine; and local factors – like planned and unplanned maintenance at stations – had been to blame for the skyrocketing prices.

In their report, AEMO said one of the biggest contributors for the energy crisis this year was a lack of coal-fired power generation at various times.

Output from the coal fleet was down almost 10 per cent for the quarter, which slashed the system’s capacity during a surging demand.

AEMO was forced to impose price caps across the market to protect users from even higher prices.

“The scale of interventions needed to manage the extent of reserve shortfalls made operation of the market … impossible,” AEMO said in its statement.

AEMO has since lifted its market suspension, but is now facing compensation claims from generators that could enter the realm of hundreds of millions of dollars.

And, given the war in Ukraine shows no sign of letting up, international factors will continue to have a significant impact on Australia’s electricity prices that is likely to lead to sustained high power bills.

The federal opposition is calling on the government to make good on their election promise to slash power bills by $275.

When asked, Prime Minister Anthony Albanese in Thursday’s Question Time would not be drawn on whether the government could make good on its promise.

Instead, he quoted his government’s “Powering Australia” plan, which he said was a comprehensive overview of “rewiring the nation”.

“We have a comprehensive plan, which is backed by the Business Council of Australia, backed by the Australian Industry Group, the Australian Chamber of Commerce and Industry, backed by the Clean Energy Council … backed by Greenpeace … And what every single one of those organisations is saying is that business need the investment certainty that they haven’t had for a decade,” he said.

“Those opposite sat on the information, knowing that energy prices would go up in July.

“Not only did they sit on it, they refused to tell the Australian people.

“They knew that that was packed into the wholesale prices, and they refused to tell them.”

Article Credited to Ellen Ransley, news.com.au

We would also greatly appreciate your support by following us on  Facebook, Linkedin, Instagram-Oracle and Instagram-Kountable for more great tips, support and the latest tax news and headlines!

Oracle Accounting & Wealth is located at Suite 31, 89-97 Jones Street ULTIMO NSW 2007. Phone: 02-9715 2977

Liability limited by a Scheme approved under Professional Standards Legislation.

Disclaimer

The information in this newsletter / factsheet is factual but general in nature. It should not and is not to be construed as advice at any level whatsoever. Because it contains general information that has not been tailored to your personal circumstances it may not be suitable information for you. You must always seek personal financial or taxation advice prior to acting on this information. Further, as many of the comments in this newsletter / factsheet are general in nature, anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.