An independent report has predicted power bills will continue to fall as new generation capacity enters the National Electricity Market.
The Australian Energy Market Commission's (AEMC) annual residential Electricity Price Trends report forecasts electricity prices across east coast states will fall by between 2 and 15 per cent over the next three years, or by an average of 8.7 per cent overall. The report predicts electricity prices will increase by 2.3 per cent in the ACT.
The Australian Energy Council's Chief Executive, Sarah McNamara, said the report is welcome news for households and businesses.
"Consistent with the recent independent review of the wholesale market it reinforces that the market is competitive with committed new generation continuing to push down wholesale prices even without recently announced government plans to underwrite more capacity."
The AEMC's assessment is primarily driven by new generation, including more than 4,200MW of committed new renewable generation, entering the market by 2022-23 and lower gas prices. In the last year of the reporting period wholesale prices are expected to rise when the Liddell power station closes, but overall wholesale electricity prices in 2022-23 will still be lower than today.
The AEMC's forecasts also do not include NSW's recently announced Electricity Infrastructure Roadmap, which aims to underwrite 12GW of renewable energy by 2030, or the Federal Government's target for investors to deliver 1000MW of new dispatchable energy in NSW to replace the Liddell power station before it closes in 2023.
"While the NSW roadmap will clearly impact the market, this is largely beyond the outlook period. The NSW Government considers it will suppress wholesale prices further late in the decade, by providing support to new generators.
"Despite concerns the closure of the Liddell power station could push up wholesale prices dramatically, the independent assessment shows east coast prices overall will be lower than they are now even after that plant's departure," Ms McNamara said.
About the Australian Energy Council
The Council represents 21 major electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia, sell gas and electricity to over 10 million homes and businesses, and are major investors in renewable energy generation.
