AEMC forecast power prices are coming down

Media release

9 December 2019

A report released by the Australian Energy Market Commission (AEMC) forecasts Australian consumers can expect lower retail electricity bills in coming years, which confirms the Government’s plan to deliver a fair deal on energy is working.

The AEMC Residential Electricity Price Trends 2019 report predicts residential electricity prices will decrease, with a representative Australian household electricity bill expected to reduce on average by almost $100 by 2021–22.

Reductions are expected across all National Electricity Market states, with a drop of over $250 expected for households in south-east Queensland.

These trends are driven by changes in the cost components that make up the overall price of a residential bill.

Wholesale costs, which make up around a third of an average retail electricity bill, are expected to go down by $62 on average due to an influx of new generation coming into the system.

Costs attributed to environmental or ‘green power’ schemes are also forecast by the AEMC to reduce by $21 on an average bill. This is attributable to the phasing out of the LRET, with its costs falling by around two thirds.

The AEMC forecast complements a number of recent reports showing prices have started to turn the corner.

The Australia Bureau of Statistics Consumer Price Index data shows for the first time there have been three consecutive quarters of national electricity price reductions.

The introduction of the Government’s Default Market Offer on 1 July 2019 has capped standing offer prices and has taken the confusion out of getting a fair deal while seeing increased competition in the market.

The Liberal National Government is committed to getting prices down and maintaining the reliability of our electricity.

While we welcome the AEMC predictions, there is more to be done.

The Government has carefully built a range of levers and tools to lower energy prices and increase reliability in a rapidly changing NEM to ensure the lights stay on. The ‘big stick’ legislation, Retailer Reliability Obligation, $1 billion Grid Reliability Fund and the Underwriting New Generation Investments program are all designed to put downward pressure on wholesale prices and deliver more reliable power to the grid to ensure the reliable, 24/7 affordable power that Australian families and businesses deserve.

For more information on the Government’s framework on energy and emissions reduction visit energy.gov.au/energy-policy-blueprint-fair-deal-energy

Minister for Energy and Emissions Reduction