Energy prices are continuing to fall under the Morrison Government.
According to the Australian Energy Regulator’s (AER) Wholesale Markets Quarterly Q3 2020 report, wholesale electricity and gas prices during the third quarter of 2020 dropped to levels not seen since 2014 and 2016 respectively.
Average wholesale electricity prices ranged from $34 per MWh in Queensland to $54 per MWh in Victoria, marking the first time since 2014 that third quarter prices were below $55 per MWh in all regions.
Importantly for consumers, significant wholesale price falls, also reported by the Australian Energy Market Operator (AEMO), are flowing through to retail electricity price reductions.
Recent ABS findings show that year-on-year retail electricity prices have fallen for seven straight quarters, with prices dropping by 0.7 per cent for the quarter nationally and 2.5 per cent through the year.
This comes on top of recent findings from the Australian Competition and Consumer Commission (ACCC) that shows competitive retail prices have fallen by up to 7.6 per cent for residential customers, and 3.7 per cent for small businesses from 2018.
The AER also found wholesale gas prices have remained at 2016 levels of $4-$5.50 per gigajoule (GJ). In Victoria, wholesale gas prices decreased for the seventh consecutive quarter to $4.56 per GJ.
A contributing factor to these trends is the Day Ahead Auction (DAA) scheme. The scheme was introduced by the Government in 2019 and the AER note that it is continuing to have a positive impact on competition and driving down gas prices.
The AER highlighted increased gas generation is important for keeping the lights on, particularly during the evening demand peak when solar generation drops off.
Minister for Energy and Emissions Reduction Angus Taylor said lower energy costs were good news for Australians, especially those families and businesses experiencing financial hardship due to the COVID-19 pandemic.
“COVID-19 continues to impact households and businesses, so any reduction in energy prices across eastern Australia is welcome relief for many Australians,” Minister Taylor said.
“When Australians are paying less for their energy bills, they have more money in their pocket and the Government remains focused on helping all Australians get ahead.
“Cheaper energy will also help drive the recovery of businesses hit hard by the pandemic.
“Many critical industries rely on gas to power their operations and when businesses have access to affordable and reliable gas, they can hire more Australians.
“Cheaper energy brings benefits across the Australian economy, which is why the Government will continue to take strong action to bring down the cost of energy for all Australians.”
With wholesale prices making up around a third of retail energy bills, the Government expects falling wholesale electricity prices to be passed on to consumers. The Government’s Big Stick Legislation will ensure this happens.
Since the Big Stick legislation was first introduced into Parliament, there have been 13 straight months of wholesale price reductions on the previous year.
The best way for consumers to benefit from lower wholesale electricity and gas prices is to shop around for the best deal possible. The Government’s energymadeeasy.gov.au website makes shopping around easier than ever.
