News

Get ready for huge rise in your electricity bill

Three major retailers have announced increases of up to 20% in their power prices.
Three major retailers have announced increases of up to 20% in their power prices. Supplied

POWER prices are set to rocket after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states.

Origin, EnergyAustralia and AGL have all announced price increases for electricity and gas starting from July 1.
Small businesses may be the hardest hit, especially Origin customers in South Australia, which will see prices rise by a whopping $1453 a year when increases to gas and electricity bills are combined.

The biggest increase for residential customers will be for AGL customers in ACT, who will pay an extra $579 a year for a combined electricity and gas rise.

In NSW, residential EnergyAustralia customers will see electricity prices increase by up to 19.6 per cent. Origin Energy customers will get a 16.1 per cent rise.

The price hikes will take effect from July 1.

In its announcement today, EnergyAustralia blamed recent rises in wholesale prices following the closure of large coal-fired power stations, as well as increased demand for gas for export.

"This is bad news for families and businesses and absolutely not what they wanted to hear," EnergyAustralia Chief Customer Officer Kim Clarke said in a statement.

But Santos chief executive Kevin Gallagher rejected suggestions that increased demand for gas by LNG projects in Queensland was causing price rises.

"Gas prices have increased because all the cheap gas has been developed, so it is costing more to get gas out of the ground," Mr Gallagher told the American Chamber of Commerce lunch in Sydney. "This therefore is a pricing problem, not a gas shortage problem."

He said politicians had been reluctant to challenge the negative perception of coal seam gas and fracking.

"We are being asked to believe that high prices and shortages in supply are the fault of the LNG exporters while at the same time state and territory governments have either banned or restricted gas exploration and production," Mr Gallagher said.

"Unfortunately the politics of the situation have now taken over."

Mr Gallagher blamed "the failure by previous governments at all levels" to encourage the development of a steady gas supply.

It comes as the Australian Energy Market Operator released a report showing South Australia and Victoria were still at risk of power supply shortfalls over the next two years during peak periods.

HOW DID WE GET INTO THIS SITUATION?

Director of the Grattan Institute's Energy Program, Tony Wood, said he believed the situation was the result of a significant failure of energy policy is both the state and federal level.

"Labor, The Greens and the Coalition all have a level of capability and consumers should feel very angry," he said.
"We wanted lower prices, increased reliability and a reduction in emissions and we've got exactly the opposite of all three," he said.

Mr Wood said wholesale prices had been driven up by rising gas prices.

This is partly because Australia's gas prices are linked to global prices in a way they weren't five or six years ago, because there were no exports from the east coast.

But Mr Wood said the entire energy system was going through enormous change and this had also put supply and demand out of whack.

He said this should improve if state governments relaxed restrictions on gas development and if the federal government's threat to restrict gas exports began to have an impact.

But he said the federal government could also give the regulator greater power to bring prices down and this may also help.

WE CAN'T GO BACK

Even if Australia decided not to bother with meeting its commitments to reduce carbon emissions as part of the Paris Agreement, Mr Wood said the world had moved on.

"Power stations would still shut down, and industry would still be facing uncertainty and be factoring in carbon emissions regardless of the policy," he said.

"But rather than say, we got this wrong and we're going to fix it together, we're seeing what Kevin Rudd used to call - the blame game.

"It's a nasty problem and has led to very bad outcomes, and Labor, the Greens and the Coalition have all got their fingerprints on it."

The lack of government policy has seen energy reliability decrease because businesses are reluctant to invest in new solar, wind or even coal.

"Price increases are nasty and a price increase of 20 per cent is really nasty but I think consumers and businesses should be more concerned that these price increases are also accompanied by concerns about the security of supply," Mr Wood said.

He said consumers, taxpayers and environmentalists all had a reason to be angry, as Australians were dealing with blackouts and price rises - while carbon emissions continue to rise.

While the Finkel review doesn't satisfy everyone, Mr Wood said it had put forward good suggestions on how to move forward, get prices lower and improve reliability.

"Ultimately it is a very workable model, it's a comprehensive view and it can, and should be, supported," he said.
He also dismissed debate about the merits of "clean coal" and whether a clean energy target recommended by the

Finkel review should be set at a level that would give incentives to this industry.

Mr Wood said setting a higher emissions target to allow coal to get some incentives would be fine as the goal was to reduce carbon emissions, not get rid of coal.

"The threshold doesn't drive emissions reduction," he said. "What drives emissions reduction is our commitment to the Paris Agreement.

"We shouldn't be worried about the mix of energy sources, we should worry about the lowest cost to achieve the target."

THE NEW NORMAL

Mr Wood said politicians should be more honest with the public about future energy prices.

Historically coal has been a very cheap way of producing electricity, costing about $40 per megawatt hour. But Mr Wood said new efficient coal-fired power stations would cost double that, about $80-90Mwh.

Gas is even more expensive, hovering about $110Mwh and even if this dropped due to policy changes, would still likely be about $90Mwh.

While wind and solar are cheaper, their prices don't include the cost of battery storage and pumped hydro to ensure stability of their supply.

"So the only obvious conclusion is we're not going back to $40Mwh any time soon," Mr Wood said.

"In some ways the negligence of the government is to seek to blame somebody else and not the recognise and communicate to consumers that this is where we are, and we can't turn back to the good old days.

"We have no choice but to move forward as affordably and reliably as we can."

- With AAP

News Corp Australia

Topics:  budget editors picks electricity power bills power prices


Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Just add some heavenly ingredients

LOAVES MADE WITH SUNSHINE: Catherine Wray with staff member Alana Demetriou.

Fresh bread with added sunshine

A farewell to Garth

Garth Madill addressed the 250-strong  public celebration of the life of Garth Prowd

Community farewells Garth Prowd

Hot and dry conditions spark weekend infernos

DESTRUCTION: A fire at Noosa North Shore destroyed three houses and damaged two others.

Noosa was ablaze with at least three separate fires at the weekend

Local Partners

Speak up for road safety this week

Emergency services are encouraging community groups to get involved with Road Safety Week this week to advocate responsible driving and awareness.

Painting a brighter future for koalas

WORTH SAVING: The Queensland Koala Crusaders' Community Crowdfunding Campaign aims to raise $30,000 towards the cost of planting 10,000 trees for koalas.

Queensland Koala Crusaders have launched a crowdfunding campaign

REVEALED: Liam Gallagher is coming to Falls Festival

English musician, singer, and songwriter, former lead singer of the rock band Oasis, Liam Gallagher performs during his concert at National Olympic Sports Center in Beijing, China, 10 August 2017.

He revealed the news ahead of the official line up announcement

GoT's mind-blowing dragon theory

THE shock ending to Game of Thrones’ latest episode divided fans, but a theory about the show’s dragons could explain it.

Massive talent from little folk on show in Little Big Shots

Shane Jacobson hosts Little Big Shots.

Shane Jacobson has as much fun as his guests in new talent show.

‘I’m pissed off’: Bachelorette finally loses it

Matty is made take Elise on a date by her dad.

UNREST is brewing in the Bachelor mansion.

What's on the big screen this week

Domhnall Gleeson and Tom Cruise in a scene from American Made.

TOM Cruise is flying high in Doug Liman's drug drama American Made.

Bride and Prejudice's Chris reveals more family heartache

Grant and Chris feature on the TV series Bride & Prejudice. Supplied by Channel 7.

His dad’s health has dealt a massive blow to their happy life

Nicole's ready to bust out of Doctor Doctor's love triangle

Nicole da Silva stars in season two of Doctor Doctor.

New season gets a fresh injection of relationship dilemmas.

In the heart of Mooloolaba

Stand out from the rest.

Open for inspection homes August 24 - 30

Check out this weekend's homes open for inspection.

Rapid rise in growth for the Sunshine Coast

Coast transforms from beach culture to sustainable community

Outstanding location and size

Character home on 690sq m with medium density zoning near the river

Strangers restore home after trashed by drug-addicts

Strangers restore home.

A Towoomba man was facing the prospect of never renting again

Ready to SELL your property?

Post Your Ad Here!