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(AUSTRALIA) JUST IN: AEMC REPORT: Households can expect to pay around $77 less (or 6%) for electricity in 2024 than they do today, as cheaper renewable energy flows to consumers, reducing prices to their lowest levels since 2017 #AceNewsDesk report

#AceNewsReport – Nov.25: Australian Energy Market Commission’s Residential electricity price trends report 2021: AEMC Chair Anna Collyer said the report shows that, based on current trends, prices per kilowatt hour are likely to be under 26c p/kWh by June 2024, the first time since 2016/17……

#AceDailyNews reports on the AEMC’s 2021 annual residential electricity price trends report examines the direction household electricity prices will take over the next three years. It finds that lower wholesale costs, and reduced environmental costs in most regions, are continuing to drive overall prices down…

To access a media release and infographic for your jurisdiction:

ABC NEWS REPORT: National energy market report details expected power bill price drops across Australia with Queensland leading the way in price drops

25 November 2021:

“This illustrates how integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers,” Ms Collyer said.    

“We can now see far enough into the future to be confident that power prices paid by consumers will continue to trend downwards over the next three years, despite the staged exit of Liddell power station in 2022 and 2023, one of the biggest coal-fired generators in the national electricity market. 

“But while wholesale costs and environmental costs are trending lower, we are starting to see increases in the cost of network investments, and this is likely to accelerate over the next decade as more network investment is required to connect dispersed new generation to the grid. 

“There are also regional differences across states and territories in the national electricity market that will affect price outcomes. And what energy offer you have, how much you use and whether you also have solar or gas will also affect your bill.” 

Overall:

  • Wholesale costs are expected to fall by about $92 between FY20/21 and FY23/24, building on falls during FY20/21. Wholesale costs represent about 35% of the representative customer’s bill across the national energy market. 
  • Network costs are expected to increase by about $31 out to FY23/24, equally spread across transmission and distribution networks. 
  • Environmental costs are expected to drop by $16 out to FY23/24 due to a decrease in large-scale renewable energy costs as more renewable generation comes online. After seeing these costs mostly increase over the past decade, they are projected to drop in FY22/23 and FY23/24.1 

Across the national electricity market jurisdictions from FY20/21 to FY23/24:

  • South East Queensland electricity prices are estimated to fall by 10% or $126 (an annual average drop of -3.6%) 
  • South Australian electricity prices are estimated to fall by 2% or just over $35 (an annual average drop of -0.7%) 
  • Victorian electricity prices are estimated to fall by 8% or about $99 (an annual average drop of -2.6%) 
  • NSW electricity prices are estimated to fall by 4% or about $50 (an annual average drop of -1.3%) 
  • ACT electricity prices are estimated to rise by 4% or $77 (an annual average increase of 1.3%) 
  • Tasmanian electricity prices are estimated to fall by 6% or $125 (an annual average drop of -2.1%). 
High voltage powerlines outside Melbourne
Power prices are expected to drop over the next three years.(ABC News: Michael Barnett)

Ms Collyer said the report shows that prices are expected to fall slightly in FY21/22, increase by around $20 a year in FY22/23 as Liddell exits the system, and then fall again as lost capacity is replaced by a combination of solar, wind, gas and batteries. 

“While we have just under 2,500MW of generation expected to exit the grid over the next three years, there are almost 5,500MW of committed new large-scale generation and storage projects coming online over the same time period,” Ms Collyer said.   

“This is in addition to 4,130 MW of new rooftop solar PV capacity, which will also influence prices by lowering demand and through exports.”    

“This diversity of generation and storage puts us in a strong position to manage the forecast retirement of Liddell in NSW and the closure of gas fired generators in SA and Qld. Understanding what’s driving prices highlights the importance of being smart in how we connect resources to the grid and ensure the back-up needed for a secure supply, so the benefits of low cost and low emission generation aren’t eroded,” she said. 

“Everything we’re doing at the AEMC and ESB is about making the most of renewables. That means maximising the benefits through reforms to distributed energy resources such as solar, minimising the emerging costs of planned network investments to connect renewables to consumers, while ensuring we have electricity when and where we need it to keep the lights on.”    

Media: media@aemc.gov.au or 0409 514 643

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Household power bills are predicted to continue falling in the coming years, despite the closure of major power stations including Liddell power station in New South Wales.

It forecasts an average national drop in annual bills of $77 by 2024.

AEMC chair Anna Collyer said power bills were expected to rise slightly, by about $20 in 2022/23, as Liddell closed down.

“Prices are expected to … fall again as lost capacity is replaced by a combination of solar, wind, gas and batteries,” Ms Collyer said.

“While we have just under 2,500 megawatts (MW) of generation expected to exit the grid over the next three years, there are almost 5,500MW of committed new large-scale generation and storage projects coming online over the same time period.

“This is in addition to 4,130MW of new rooftop solar PV [photovoltaic] capacity, which will also influence prices by lowering demand and through exports.”

Queensland leading the nation

South-east Queensland is predicted to see the biggest price drop, with annual bills falling by 10 per cent ($126) by 2024, to reach their lowest level in more than a decade.

A headshot of a woman with short brown hair, wearing a black suit, smiling at the camera
“Integrating renewables in a smart way makes it possible to have both lower emissions and lower costs,” Anna Collyer says.(Supplied: AEMC)

The report predicts the price falls will be driven by new solar and wind farms and new battery storage coming online in the state.

“Significant new generation has been committed in south-east Queensland,” Ms Collyer said.

“Wind farm projects at Kennedy Energy Park and Kaban, nine solar projects … and the Wandoan battery.”

A price drop of $50 by 2024 is forecast for New South Wales, $99 in Victoria, $125 in Tasmania and $35 in South Australia.

Prices rise in the ACT

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A net increase of 4 per cent, or $77, is forecast by 2024.

Ms Collyer said the modelling showed prices in the ACT increasing by $99 this financial year, and by $123 the following, before falling by $145 in 2023/24.

“A comparatively large number of ACT consumers, 28.7 per cent, are still on standing offers rather than cheaper market offers so there are savings available to households if they shop around for a better deal,” she said.

The report said the price rise would be driven by rising wholesale and network costs.

It said environmental costs in the ACT would also increase due to the costs of large scale Feed-in Tariff Schemes.

Closures in South Australia

A modest drop of $35 in South Australia is predicted despite the closure of the Torrens Island and Osbourne units over the next few years.

“This illustrates how integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers,” Ms Collyer said.

South Australia is set to be hit by higher network investment costs, which are predicted to accelerate over the next decade to cope with the steep rise in power being returned to the grid from households.

The state recently set a world record by generating more electricity from solar than it consumed for periods of time on five different days.

The report does not include the Northern Territory or Western Australia.

“They’re not part of the national electricity market, they both have quite different markets, and in each case, the government asked us to not pursue the price trends in those regions because it wasn’t as meaningful for their customers,” Ms Collyer said.

#AceNewsDesk report ………..Published: Nov.25: 2021:

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