Annual wholesale energy prices across Eastern Australia have continued to fall.
The Australian Energy Regulator's (AER) Wholesale Markets Quarterly Q2 2020 found average electricity prices across the National Electricity Market were the lowest in five years.
Minister for Energy and Emissions Reduction Angus Taylor said the AER also found prices are expected to continue to fall and consumers should take advantage of these lower prices, particularly as Australian families are spending more time at home and energy usage has increased.
"With wholesale energy prices making up around 30 per cent of residential energy bills and even more for business, falling energy prices is good news for families and business owners," Minister Taylor said.
"The Government has been clear: lower wholesale prices must be translated into lower residential prices for Australian families and small businesses.
"It is pleasing to see some energy retailers have responded to the lower wholesale prices by offering new deals to their customers. Energy companies must put energy consumers first especially as many struggle with the impact of the COVID-19 pandemic.
"I encourage Australian families and small businesses to shop around to make sure they are getting the best possible deal on electricity and gas."
The AER report follows the quarterly report from the Australian Energy Market Operator (AEMO) in July which found energy prices had hit their lowest level in five years during the second quarter of 2020.
The latest AER report said 2019-20 marked an ongoing transformation in supply across the National Electricity Market, which covers the eastern states, Tasmania and South Australia.
The AER found Q2 2020 prices in all regions were significantly lower than their 2019 levels, particularly from record levels in Q2 2019 in Victoria and South Australia.
Annual average whole electricity prices ranged from $56 per MW hour in Queensland and Tasmania to $84 per MW hour in Victoria, with annual prices below $85 MW hour in all NEM regions for the first time since 2014-15.
Prices for 2019-20 were the lowest annual prices observed since 2011-12 in Queensland, 2014-15 in Tasmania, 2015-16 in South Australia and NSW and 2016-17 in Victoria.
There is also positive news for gas users, with the report finding that gas prices were at their lowest levels since the 2015-16 financial year with all regions reporting prices below $7.25/GJ.
Total east coast gas production reached record levels over 2019-20, increasing 5.2 per cent since the last year to 1948 PJ. This increase in production, particularly from Queensland, is promising for the sector as it has continued despite the lower gas prices.
Minister Taylor said Australia's competitive advantage has always been based on cheap energy and that gas will be central to our ongoing economic recovery.
"Affordable gas has never been more important - particularly as the Australian economy recovers from the impact of the COVID19 pandemic," Minister Taylor said
"This is why the Australian Government believes a gas-fired recovery will drive jobs and economic growth.
"Gas also has an important role to play in providing grid reliability and in reducing emissions - it is complementary to renewables, not a competitor."
The AER has also confirmed that the Day Ahead Auction (DAA) scheme has had positive impacts on competition and will drive down prices.
The DAA allows shippers of gas to bid-in to utilise previously inaccessible contracted pipeline capacity.
Since the scheme was commenced by Government in March 2019 to June 2020, over 49.1PJ of capacity across 10 different pipelines and compression facilitates has been unlocked.
"Industry have reported that our Day-Ahead Auction scheme has exceeded their expectations" Minister Taylor said.
"Not only is more gas flowing south to where it is needed, but the auction system is cheaper for participants as against having a contract. This saving will flow on to consumers over time, leading to lower energy bills for households and business."
The AER report, Wholesale Markets Quarterly Q2 2020, is available on the AER website.
Households and small businesses can also use the Government's free energy price comparison website Energy Made Easy to shop around for the best deal for their current situation.
