Immediate cut to 'outrageous' power bills from January 1 after political pressure

Power prices for half a million Australian families and businesses will be cut from Tuesday as energy retailers bring down their standing offers for loyal customers. 

Energy Minister Angus Taylor.

Following pressure from the Coalition government, AGL, Origin and Energy Australia and other companies have committed to savings worth hundreds of dollars for many longtime customers who have been subject to less favourable terms than those who actively shop around.

In New South Wales, where customers on standing offers will see reductions of 10-15 per cent on charges for energy usage, the average benefit for residential customers will be $200 annually. Concession card-holders could enjoy benefits of up to $250.

In Victoria, with reductions of between 10 and 35 per cent, residential customers will see an average saving of $313.

Read the story from The Age by Fergus Hunter - “Immediate cut to 'outrageous' power bills from January 1 after political pressure.”

Renewables will impact on power prices - Frank Calabria, Origin Energy CEO

Elysse Morgan.

Power prices are set to fall as wholesale prices continue to ease. Origin Energy's CEO, Frank Calabria, says falling prices have more to do with renewables.

Watch the interview with Elysse Morgan from The Business on ABC television.

New retailers pushing power prices down more than government

Competition from a new major energy company is driving down power prices faster than regulatory bodies according to analysts, but governments are unlikely to abandon plans to reform the gas and electricity market.

More consumer choice in the market is having a greater impact on power prices.

Perth-based energy company Alinta expanded into the east coast energy market with the billion dollar acquisition of Victorian coal-fired power station Loy Yang B late last year, and its aggressive growth strategy is being seen in the market as one of the major drivers of lower power bills.

“Alinta is doing more for lowering electricity costs on the east coast than anything the Australian Competition and Consumer Commission will do,” Wood Mackenzie principal lead for oil and gas, Saul Kavonic, told Fairfax Media.

Read Cole Latimer’s story in The Age - “New retailers pushing power prices down more than government.”

Power prices forecast to fall over next two years but AEMC warns they won't last

Power prices in Australia rose almost 11% during 2017 but a new forecast says they will fall over the next two years because of the entry of 5,300 MW of new generation capacity into the national electricity market – most of it renewable.

The Liddell power station in New South Wales. Power prices in Australia rose almost 11% during 2017. 

A new assessment from the Australian Energy Market Commission predicts power prices will fall over the next two years, beginning in mid-2018.

But the AEMC, which played a significant role in designing the Turnbull government’s proposed national energy guarantee, says the price reductions won’t last if governments don’t settle an energy policy that provides incentives for investing in dispatchable power.

Read Katherine Murphy’s story on The Guardian - “Power prices forecast to fall over next two years but AEMC warns they won't last.”

Frydenberg 'absolutely confident' energy prices will fall but gives no guarantee

The energy minister, Josh Frydenberg, has stopped short of guaranteeing prices will come down under the Turnbull government’s new energy policy, but says he’s “absolutely confident” power prices will fall.

Josh Frydenberg and Malcolm Turnbull speak to a
 worker at the Ixom plant in Melbourne, on Friday. 

Frydenberg also indicated the major parties might be able to come to terms on the mechanism, which imposes reliability and emissions reduction obligations on electricity retailers.

He said it was possible Labor might agree on the mechanism but propose a more ambitious level of emissions reductions, with that a point of difference between Labor and the Coalition at the next federal election.

Read Katharine Murphy’s story on The Guardian - “Frydenberg 'absolutely confident' energy prices will fall but gives no guarantee.”

Expert views make way for political expediency in climate debate

The patient's vital signs are not good. Power prices are high, and emissions haemorrhaging. Reliability and security of supply are in doubt. We need a treatment plan, and fast.

A Clean Energy Target would help make sure that
as ageing coal-fired power plants are retired,
 there is enough investment in renewables to replace them.

Such was the diagnosis of the national electricity market on Monday by Australia's chief scientist Alan Finkel, the man whose blueprint to improve the system was supposed to take the politics out of energy policy. So, how's that working out?

The answer is, pretty poorly. In his speech to the National Energy Summit on Monday, Environment and Energy Minister Josh Frydenberg gave the strongest hint yet that the prospect of any clean energy target was dead and buried, claiming the falling cost of renewable energy meant the subsidies were no longer necessary.

Cue the cycle of politicking and tail-chasing that has wasted more than a decade of Australian climate policy, frustrating the business community and leaving the public wondering: is any leader capable of stopping the bleeding?

Read Nicole Hasham’s comment in today’s Melbourne Age - “Expert views make way for political expediency in climate debate.”

Top adviser urges Coalition to end paralysis on clean energy target

One of Australia's most senior energy advisers has pleaded with the Turnbull government to end its paralysis over a clean energy target, saying the lack of clarity is hurting consumers already hit by soaring power prices.

Chloe Munro, chairwoman of the national energy
market operator's expert advisory panel.

"At least the states have a plan," said Chloe Munro, chairwoman of the national energy market operator's expert advisory panel.

Speaking at a symposium on energy futures, she said that while other countries were grappling with the transition towards clean energy, Australia was leaving it to the market, with potentially negative consequences for the community.

She said states were setting renewable energy targets in a time of unstable supply, rapidly rising wholesale prices and a lack of direction from Canberra.

Read Adam Carey’s story in today’s Melbourne Age - “Top adviser urges Coalition to end paralysis on clean energy target.

Solar Batteries: Australians see energy storage as the future, poll finds

As power prices continue to surge, Australians believe household solar storage batteries are the key to cheaper and more reliable energy, according to a new poll of 2,000 households.

Murray Green installed a solar battery
in his Sydney home last year.

The Climate Council found nearly three-quarters of those surveyed believe batteries, coupled with solar systems, would become commonplace within 10 years.

Of those who already had solar systems, 68 per cent were considering adding a household storage battery.

Most said the primary motivation for buying a solar battery was to reduce power bills.

Read the ABC News story by consumer affairs reporter Sarah Farnsworth and the National Reporting Team's Rebecca Armitage - “Solar Batteries: Australians see energy storage as the future, poll finds.”

Caught in a death spiral

As power prices rise, wealthier customers cut use, leaving the poor to pay more.

What’s most terrifying the electricity industry isn’t the threat of price control or a clean energy target or even being forced to keep open power stations that have long since ceased to work properly. It’s not even the government’s inability to come up with a clear set of rules. It’s a fear more primal – the same one gripping the national broadband network, public schools and private health funds. Analysts at AGL Energy call it ‘‘the death spiral’’. US economist Craig Severance coined the term six years ago. ‘‘In this nightmare, a utility commits to build a very expensive new power plant,’’ he wrote. ‘‘However, when electric rates are raised to pay for the new plant, the rate shock moves customers to cut their use. The utility then has no way to pay for the new power plant unless it raises rates even higher – causing a further spiral as customers cut their use even more or walk away.

‘‘In the final stages of that death spiral, the utility’s more affluent customers have drastically cut purchases by implementing efficiency and on-site [solar] power, but the poorest customers have been unable to finance such measures. The utility is then left attempting to collect higher and higher rates from poorer and poorer customers.’’

It’s been playing out in Australia since the late 2000s.

Read Peter Martin’s comment in today’s Melbourne Age - “Caught in a death spiral.”

Scott Morrison says partisan politics has driven up power prices

Treasurer Scott Morrison has flagged further support from the Turnbull frontbench for bipartisan energy policy, acknowledging that politics as usual has driven up power prices, and calling for both parties to “meet in the middle”.

Scott Morrison examines a lump of coal, which he used
in an attempt to belittle Labor. The treasurer is
now calling for bipartisan energy policy.

The remarks, reported in Rockhampton’s Morning Bulletin, follow a speech Morrison delivered in Adelaide last week where he admitted building new coal power plants would not bring down power prices.

The statements appear to mark a shift from Morrison’s previous interjections in the energy policy debate, which included him brandishing a piece of coal in question time.

Read Michael Slezak’s story on The Guardian - “Scott Morrison says partisan politics has driven up power prices.”

Breaking down the cost of renewables

Kobad Bhavnagri

Debates about renewable energy are back in the headlines.

Tony Abbott popped up on the weekend saying that the Renewable Energy Target should be scrapped, because it will push up power prices.

But yesterday, the Shadow Energy minister Mark Butler told RN Breakfast that the target puts downward pressure on prices.

So can we really continue our transition toward renewable energy without any extra costs?

Listen to today’s Radio National interview by Hamish Macdonald with the, head of Bloomberg New Energy Finance in Australia, Kobad Bhavnagri - “Breaking down the cost of renewables.”

Victoria Government eager to see further power price cuts

The Victorian government
wants to see price cuts.

Victoria's households could see power prices fall further than expected with the Victorian government throwing its weight behind a push by the industry regulator to force through price cuts, while it has also called publicly for changes to the way power prices are fixed.

Electricity and gas distributors such as Powercor, Citipower, United Energy and Jemena have launched legal action aimed at restricting the extent of price cuts that could flow through to households over the next few years.

Read the story in today’s Melbourne Age - “Call to overhaul power price fixing.”