Power Bills Forecast to Fall
Power bills are forecast to decline in Australia over the next three years. According to official forecasts published by the Australian Energy Market Commission (AEMC), we can thank renewable energy for the good news, with an increasing supply of renewables on the market helping to drive prices down. While these forecasts are only estimates and widely dependent on current trends, we may have reached a critical stage where the evolution of green power is driven by economic factors along with environmental concerns.
With no new investment in gas or coal generation forecast beyond projects already committed, the future of Australia's energy grid is almost entirely dependent on our robust natural supply of solar and wind power. Along with the new generation capacity of renewables, costs will also come down thanks to falling distribution costs and cheaper large-scale generation certificates under the Renewable Energy Target.
Annual residential bills, when weighted by customer numbers, are expected to decrease by 7.1% or $97 over the three year period. According to the report, Queenslanders will experience the biggest savings, with electricity in South-East Queensland expected to fall by 20% by June 2022. This represents very significant saving of $278 on the annual bill of a representative household customer. New South Wales prices are tipped to fall by 8% or $107, with prices in Victoria set to fall by 5% or $53.
Electricity prices in the ACT are set to fall by 7% or $134, in Tasmania by 5% or $93, and in South Australia by 2% or $27. The AEMC could not adequately forecast price changes in the Northern Territory, with Western Australia the only state likely to see an increase in power bills with an estimated rise of 6% or $102 due to increased gas costs. There are many reasons for the nationwide decrease, with wholesale costs expected to go down 11.6%, regulated network costs down by 1.8%, and environmental costs down by a massive 23.9%.
According to the AEMC, increased renewable supply and lower prices are dependent on further investment in critical renewable technology. From solar cells and wind generation through to batteries, each piece of the puzzle has an important role to play: "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."
The new energy capability is a balanced mix of solar and wind power. According to the AEMC's report, committed new generation includes 2,338MW of solar, 2,566MW of wind, and 210MW of gas turbine power. In addition, there was additional modelled investment by the AEMC for 15,55MW of battery power, 1,553MW of wind power, and 372MW of solar power to meet the market's growing needs for affordable electricity.