Electricity prices in Australia about to drop over the next two years

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High tension electricity towers are seen close to a power station on the outskirts of Melbourne, February 24, 2011. Reuters/Mick Tsikas

Some Australian households and businesses can expect a better new year as they are about to pay lower power bills. Electricity prices are tipped to fall over the next two years, thanks to the entry of new generation capacity.

This is according to a national trend analysis of the Australian Energy Market Commission. Its findings released on Monday cited the increased use of relatively cheap renewable nervy.

More wind and solar supply mean lower electricity prices. Aside from the renewables from the stream, lower electricity prices will be assisted by the return to service of the Swanbank E gas power station.

Electricity prices in Queensland rose about 3.4 percent but are expected to drop by 7.1 percent. New South Wales saw a 10.2 percent rise and could drop by an average of 6.6 percent per year over two years.

This year’s rise in South Australia was around 17 percent and could fall 7.3 percent. In Victoria, it was a rise of 15.9 percent and could fall 8.2 percent. The rise was 10.9 percent in Western Australia, and the reduction could be 6.3 percent. The rise was two percent in Tasmania; the drop could be 6.5 percent.

However, the AEMC has been quick to warn that electricity prices could rise again because of the closure of coal-fired generators, taking Australian consumers on a power price rollercoaster. When old power stations close down, supply drops and prices go up.

The AEMC said that the approaching electricity price reductions will not last if governments will not settle on an energy policy that gives incentives for investing in dispatchable power. In the ACT, for instance, the rise was 20.3 percent. There will be a rise over two years averaging 1.8 percent from 2018. The rise was 0.5 percent in the Northern Territory and the next two years will see another increase of 2.5 percent.

“On a national basis, prices rose almost 11 per cent this year, but with extra supply in the market, we estimate this will be offset by a 12 per cent fall over the following two years,” the AEMC said in a statement, according to News.com.au. It added that it needs governments to come up with new policies for these reductions to last. The AEMC has played a pivotal part in designing the proposed national energy guaranteed by the Turnbull government.

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