The Australian Energy Market Commission (AEMC) has released a report saying that renewables will drive down electricity prices around Australia over the next three years, with savings of as much as 9% on offer due to the impact of renewable energy entering the grid.
The AEMC report says that renewables will drive down electricity prices by as much as 9% over the next three years, with increased production of electricity via renewable energy said to be the major driver of price reductions.
The AEMC says that all states in the National Electricity Market, which includes Queensland, Victoria, South Australia, Tasmania and New South Wales will have significantly lower electricity prices in the coming 36-month period.
The release of the report marks the second consecutive year that the AEMC has predicted that electricity prices will fall.
However, while there are a number of winners in the equation, the AEMC says that electricity prices for the Australian Capital Territory will see a slight increase.
The AEMC’s Residential Electricity Price Trends Report 2020 says that wind, hydroelectric and solar power, combined with lower gas prices will drive down electricity prices for much of Australia moving into the future.
Victoria is set to see its electricity prices drop most significantly, with the AEMC predicting a 15% drop in the price of electricity, driven by renewable power generation from wind power, combined with low gas prices.
Queensland is set to receive a 14% drop on their electricity prices, alongside New South Wales who will see their energy prices jump back in 2023 as capacity is lowered with the closure of a number of coal-fired plants. South Australia wil see a 11% drop in their electricity prices, while Tasmania will benefit from a 4% reduction.
The AEMC’s Chief Executive, Ben Barr has issued a statement saying that “the projections across Australia are really encouraging… prices we’re projecting to fall across Australia about 9 per cent, or about $120 per customer over three years.”
“In South Australia, it’s even larger than that, so about $200 per customer, depending on how much electricity you use.”
We’ve reported previously that South Australia is one of the most progressive Australian states in the context of environmental concerns and renewable power generation. South Australia has already introduced a bill that would see a ban on single-use plastics, as well as becoming the first jurisdiction to become powered by 100% renewable energy.
The AEMC’s Mr Barr added that “what’s really driving that across the national electricity market is new supply entering the market making downward pressure on the cost of producing electricity, but also due to gas prices flowing through into those wholesale energy costs.”
“This is the second year and that is really good news for households,” Mr Barr added in reference to the AEMC’s second consecutive year forecasting a drop in electricity prices.
“One of the objectives of the report is to let customers know what we think is going to happen so they’re armed with that and they can ring up their retailer and say, ‘I hear prices are falling, what sort of deal can I get?”
Overall, the AEMC’s report predicts that renewables, combined with low gas prices will drive down electricity prices for the next three years, which will rebound slightly as capacity is expected to drop, with a number of coal-fired power generation plants due to come offline in 2023.