The Australian Energy Market Commission (AEMC) has forecast the price of residential electricity is estimated to start falling next year and continue to fall until 2022.
AEMC says energy users in Queensland are set to see the biggest benefit as power prices fall in most Australian states and territories over the next three years.
Official forecasts published by AEMC show the continued price falls are mostly driven by increasing supplies of primarily renewable energy generation in the electricity market.
The advisory body predicts further investment in batteries, wind and solar as an “optimal mix” of generation investment to meet power system needs at the lowest cost to consumers.
No new investment in gas or coal generation is forecast beyond projects already committed.
The report forecasts South-East Queensland electricity prices will fall by 20 per cent by June 2022, a saving of $278 on the annual bill of a representative household customer.
New South Wales prices are tipped to fall overall by eight per cent ($107), Victoria by five per cent ($53), Australian Capital Territory by seven per cent ($134), Tasmania by five per cent ($93) and South Australia by two per cent ($27).
Prices in Western Australia are estimated to rise by six per cent, or $102 by 2022, mainly due to increased gas costs.
The AEMC was not provided with enough information to adequately forecast price changes in the Northern Territory.
The AEMC’s chairman, John Pierce, said the forecasts reflected a significant injection of nearly 5000 megawatts (MW) of new power supply across the country over the next three years.
“More supply puts downward pressure on prices,” he said.
“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.”
While the new generation is the biggest driver of the forecast price drops, falling distribution costs and cheaper large-scale generation certificates under the Renewable Energy Target are also contributing.
According to the AEMC’s report, committed new generation includes 2338MW of solar, 2566MW of wind and 210MW of gas turbine power.
The government advisory body also modelled a further investment in 1555MW of battery power, 1553MW of wind power and 372MW of solar power to meet the market’s needs.
EcoNews is an independent publication that relies on contributions from its readers.
WE’RE BUILDING A PLATFORM WITH A CLEAR FOCUS ON THE ENVIRONMENT, CULTURAL AND SOCIAL GOOD. CONTRIBUTE AND TOGETHER WE CAN MAKE AN IMPACT.
