A recent report on Austalia’s wholesale electricity market predicts that higher prices are the “new normal”. The report from the Grattan Institute* calls on the Government to encourage investment in low emissions power like solar energy. If the report is correct, homes and businesses that look to solar power systems and battery storage for energy will beat high wholesale electricity prices by generating their own.
Why higher wholesale electricity prices are here to stay
Across Australia’s National Energy Market (NEM) wholesale electricity prices rose by 130% between 2015 and 2017.
The value of electricity traded in the NEM more than doubled from $8 to $18 billion. In 2017, household bills increased up to 20%.
The report concludes there have been three main reasons for the upward trend in wholesale electricity prices:
- The closure of two large and ageing coal fired power stations. South Australia’s Northern closed in 2016 and Victoria’s Hazelwood closed in 2017.
- Prices of key inputs like gas and black coal rose just as more generation was required to balance closures.
- Energy generators ‘gaming’ the system by creating artificial scarcity of supply in concentrated markets. (This occurs in Queensland, South Australia and Victoria but has not appeared in NSW)
The report recommends governments to provide stable energy and climate change policies. It says keeping ageing coal-fired power stations open is not the solution even though two large closures in the last couple of years have contributed to the upward trend in prices. Instead it says investment in renewable energy should be encouraged. Clear investment incentives should exist during times of low energy supply and rising prices. Australian households and businesses would subsequently get reliable low-cost, low-emissions electricity.
SonnenFlat capped electricity prices
Solarpro is advising prospective customers not only to invest in battery storage but to specifically consider the sonnen battery because it gives access to sonnenFlat which is a effectively a solar community electricity retailer. When you join sonnenFlat you no longer receive an electricity bill and your costs are capped at $30 or $50 a month for average homes and there are larger options for businesses. Learn more…
*The Grattan Institute is an Australian public policy think tank, established in 2008. The Melbourne-based institute is non-aligned, however it defines itself as contributing “to public policy in Australia as a liberal democracy in a globalised economy.”