Radio presenter Ben Fordham has criticized Prime Minister Anthony Albanese and Energy Minister Chris Bowen over rising energy prices.
The 2GB host told listeners on Wednesday that he hoped they were sitting down as he delivered the news that their electricity bills were likely to “skyrocket”.
He cited new figures from Australia's energy market operator which showed wholesale prices in the national energy market averaged $133/MWh in the June quarter, up 23 percent from $108/MWh in the same quarter last year. The National Energy Market does not service customers in Western Australia or the Northern Territory.
“That's troubling news because wholesale prices determine retail prices, so when wholesale prices go up 23 percent, you can expect your electric bill to go up 23 percent,” Fordham said on his radio show.
“Can you afford it? Currently, the average annual electricity bill is about $1,300.
“So if we're right and [household] electricity bills will rise by a further 23 per cent, the average electricity bill in Australia will skyrocket to $1600. Households will become more expensive by an additional $300 per year.”
The Australian Energy Market Operator (AEMO) noted weak winds and reduced rainfall in southern regions, where hydroelectric generation is heavily concentrated, saw a decline in electricity supplied from wind (-20 percent) and hydro (-18 percent), while gas ( + 16 percent) and hard coal (+7 percent) increased.
Fordham described data showing gas and coal-fired power generation had “gained momentum” to keep Australia afloat, criticizing governments he said were “holding back new projects” for the former and “demonizing” the latter.
“Under Chris Bowen, electricity bills have not gone down by $275 as promised by Anthony Albanese, they have gone up by about $300 and now the bad news is that they are going to get worse,” he said.
The $275 pledge refers to Labor's election promise to reduce household electricity bills by $275 by 2025. Mr Albanese said increasing renewable energy was the “best way” to reduce those bills.
Fordham warned: “If you're already struggling with your electricity bills, avoid your inbox or letterbox because I'm sorry to hear bad news.”
But Mr Bowen's office argued that the prices did not lead to increased reliance on renewables, and in fact they did the opposite.
“The data shows that renewables are providing cheaper energy, and when we are forced to rely on coal generation and aging unreliable assets, it drives prices up,” Mr Bowen's spokeswoman said.
“The faster we can get more reliable renewables into the system, the better it will be for energy bills and energy reliability.”
A statement from Mr Bowen's office focused on the Coalition's controversial nuclear power plan.
“Peter Dutton's anti-renewables nuclear plan now ignores the need for cheaper and reliable energy supplies,” a government spokeswoman said.
“Instead, he wants to freeze new cheap, clean renewable generation and push our aging, increasingly unreliable coal-fired power fleet for the next two decades because he might be able to build a small amount of nuclear power.
“Ultimately, it will be the Australian taxpayer who pays for their nuclear antics with higher taxes and higher bills.”
A spokeswoman said the government was helping companies build “cheap, clean renewables by 2030, as well as huge amounts of new battery storage capacity to push prices down”.
“We're already seeing batteries do about twice as much heavy lifting this quarter as they did at the same time last year,” she said.
The government announced in May that it would give all Australian households a $300 energy rebate. Credits will be applied in quarterly installments from July 1, 2024.
Low wind speed and less rainfall
AEMO chief executive Daniel Westerman said low wind speeds and reduced rainfall in the June quarter (Q2 2024) came as cold weather fueled electricity demand.
“The cooler weather caused a new record for total electricity demand in the national energy market for the June quarter,” he said.
“On the east coast we have seen low temperatures and persistent frost, particularly in Victoria, which has caused higher morning peaks during the late autumn and first winter months.
“Prolonged periods of weak wind have led to reduced wind generation output, which fell 20 percent from last winter to a quarterly average of 2,657 MW, with wind availability falling to the lowest levels since Q2 2017.”
Westerman said hydro generation also produced less during the quarter, averaging 1,607 MW, down 18 percent from last year and the lowest output for the second quarter since 2017.
“These market conditions highlight the important role that batteries, pumped hydro and flexible gas generation will play as renewable generation becomes more dominant in Australia's electricity grids,” he said.
“The role of batteries in supporting morning and evening demand peaks has become more pronounced, with average generation during these periods more than doubling since last year, reflecting significant increases in battery capacity.”
Australian Energy Regulator board member Jarrod Ball explained that many factors helped push prices up during the quarter.
“While we would expect wholesale prices to rise as the weather cools in southern states and demand increases to keep people warm, the combined impact of cold weather, planned and unanticipated grid outages, combined with new supply and lower solar and wind output have pushed up electricity prices . higher than this time last year,” he said.
The energy regulator announces lower price ceilings
The Australian energy regulator's final default market offer (DMO) – a price cap that will ensure customers get the lowest possible price – was published in May and cut the maximum amount electricity retailers can charge households in NSW by up to $28 to $2,499, and in the South . Australia from July 1 by $63 to $2216.
These figures do not include the $300 home energy rebate, which means bills will be an additional $300 less than the starting price.
While the starting bid in south-east Queensland has increased by as much as $83 to $2052, the increase will be more than offset by a federal government rebate and an additional $1000 subsidy announced by the state Labor government.
In Victoria, where the default market supply is set separately by the state's Basic Services Commission, prices for households will drop by as much as 5.7 per cent, or $100, to $1655 before a $300 cut is applied.
In each state, 8 to 12 percent of households sign up for the standard market offering, which represents nearly 500,000 customers.
However, many more households will be indirectly affected by the default offer, as major retailers such as Origin Energy and AGL use state caps as a benchmark to determine the final prices set for the rest of their customers.
– with NCA NewsWire
