New data reveals wholesale gas and electricity prices have fallen significantly in 2019.
Two reports released this week - the Australian Energy Market Operator (AEMO) Quarterly Energy Dynamics Q3 2019 report and the Australian Energy Regulator (AER) Wholesale Markets Quarterly report for Q3 2019 - found gas prices were at their lowest levels since 2017.
Wholesale gas prices in the eastern states fell significantly in Q3 2019 averaging $7.95/GJ over the quarter, down from $9-10/GJ for the last year.
The rapid price drop occurred despite increased demand during the winter months, with more gas being offered at lower prices.
Importantly, there was improved competition in the gas sector and record gas production with Q3 2019 representing the highest gas production quarter on record.
Wholesale electricity prices have also fallen significantly across the National Electricity Market (NEM) in Q3 with prices in Queensland and South Australia at their lowest since 2016.
With wholesale prices making up around a third of an average retail electricity bill, this is good news for households and small businesses.
Minister for Energy and Emissions Reduction Angus Taylor said these reports highlight that our Government's policies are working with prices for wholesale electricity and gas heading in the right direction.
"The Commonwealth Government is doing its part to help secure gas supplies, encourage new investment in dispatchable reliable generation, and put downward pressure on wholesale prices", Minister Taylor said.
In August, the Government outlined new measures to strengthen Australia's domestic gas supplies including a review of the Australian Domestic Gas Security Mechanism (ADGSM) and exploring a prospective national gas reservation scheme.
The positive news for wholesale electricity prices in Queensland and South Australia was not repeated in Victoria, where they continue to have higher prices than comparative 2018 levels.
The Liberal National Government recognises reliability and transmission challenges facing the NEM and is committed to ensuring Australians have access to affordable, reliable power on the worst days.
That is why we have a very deliberate multi-pronged policy approach to address energy affordability, reliability and security including:
- The $1 billion Grid Reliability Fund,
- Underwriting the New South Wales-Queensland Interconnector,
- Implementing the Retailer Reliability Obligation,
- Building Snowy 2.0, and
- Supporting Tasmania's MarinusLink and Battery of the Nation.
We are also progressing the Underwriting New Generation Investments program to increase the level of dispatchable generation in the market, and maintain downward pressure on wholesale electricity prices.
While gas prices have turned the corner, the Government continues to call on state and territory governments to unlock additional supply to make more gas available to domestic customers, and reduce the cost of transporting gas.
For more information on the Government's framework on energy and emissions reduction visit energy.gov.au/energy-policy-blueprint-fair-deal-energy.
