News & Discussion: Electricity Infrastructure

[rev]

Wholesale electricity prices jump in winter in blow to bill relief hopes ahead of renewable surge
Wholesale electricity prices rose sharply in winter, new data shows, a blow to hopes of a fall in household power bills.

Colin Packham
energy reporter
@Colpackham
2 min read
October 30, 2024 - 2:32PM
The Australian Business Network

Wholesale electricity prices rose sharply in winter, new data from the country’s energy market operator has shown, an uplift that could fuel household bills and stoke inflation, though a surge in the amount of renewables poised to connect to the grid could offer some relief.

The Australian Energy Market Operator said wholesale electricity prices across the National Electricity Market during the three months ended September 30 rose 88 per cent from the same period one year earlier.

Much of the increase was driven by depressed renewable energy outputs which meant demand for fossil fuel generation increased.

AEMO said wholesale electricity spot prices averaged $119/MWh across the NEM, up $56/MWh. South Australia recorded the highest average quarterly price at $158/MWh followed by NSW which averaged $121/MWh. Victoria and Queensland had the lowest average wholesale prices during the quarter.

Wholesale electricity prices are not predominantly paid by households and businesses but the rise will be reflected in the next annual tariff reset early next year, though the impact will be curtailed by weaker wholesale prices throughout 2024. While the surge in winter wholesale prices may not lead to increase in household bills, it threatens to mute any downward revisions - a disappointment to Labor and policymakers have been desperate for substantial falls in electricity prices in order to ease pressure on households, amid a cost of living crisis, and accelerate the decline in inflation.

The data from AEMO, however, did offer some relief to Labor as the amount of renewables close to being connected into the grid has jumped more than 36 per cent from levels recorded one year earlier.

AEMO said 45.6GW of new renewable energy capacity was progressing through the connection process from application to commissioning, a 36 per cent increase compared to the same time last year.

Batteries saw the biggest growth, with some 14.6GW of capacity added. AEMO said the growth in batteries amounted to an 87 per cent increase on Q3 2023.

The rise in renewables is a key pillar of Labor’s plan to rapidly transition the country’s electricity grid away from coal and meet emission reduction targets.

Labor has set the ambitious target of having renewables generate 82 per cent of the country’s electricity by 2030 - which it said will lower bills.

Labor has been beset by criticism that its plan to rapidly grow renewables is unfeasible, and federal Energy Minister Chris Bowen seized on the data.

“AEMO’s latest QED confirms what we already know – the Albanese Government’s policy certainty is bring more reliable renewables into our energy grid, with a whopping 45.6GW of new capacity progressing through the connection process right now,” said Mr Bowen.

“Our Reliable Renewables Plan is the only plan supported by experts to deliver the clean, cheap, reliable and resilient energy system that Australians deserve.”

The surge in renewables will do little, however, to quell criticism. Opponents insist Labor’s plan heightens the vulnerability of Australia’s grid.

The Coalition has highlighted the increase in winter wholesale prices as evidence of the vulnerability.

Australia endured depressed wind conditions during winter, and critics insist Labor has not developed adequate supplies of alternatives such as gas - meaning future periods of so-called renewable energy droughts are likely to cause more spikes in wholesale prices.

The increase in renewables is also challenging AEMO, which is tasked with ensuring adequate supplies of electricity.

Australia’s east coast in September experienced unseasonably warm, sunny conditions - which meant a series of new records for minimum demand for electricity were set. Australia’s record proliferation of rooftop solar meant homes that would have otherwise pulled power from the grid were instead self-sufficient.

The increase in renewables meant Australia’s NEM also set a record for renewable penetration. AEMO said on September 9, renewables provided a record 72.2 per cent of the country’s power, a record high.

https://www.adelaidenow.com.au/subscrib ... -2-NOSCORE

[rubberman]

The Advertiser.

Having said that, it's fairly balanced. Because...

Almost all of that was taken from the Energy Regulator's website.

I posted it here ten days ago. However, it had been up a few days before I posted it. So, over two weeks old.

https://www.aer.gov.au/industry/wholesale/charts



For those genuinely interested, I suggest bookmarking the energy Regulator's website. You'll get it free and way sooner than via the Advertiser. It is also a lot more comprehensive.

[abc]

The Advertiser.

Having said that, it's fairly balanced. Because...

Almost all of that was taken from the Energy Regulator's website.

I posted it here ten days ago. However, it had been up a few days before I posted it. So, over two weeks old.

https://www.aer.gov.au/industry/wholesale/charts



For those genuinely interested, I suggest bookmarking the energy Regulator's website. You'll get it free and way sooner than via the Advertiser. It is also a lot more comprehensive.

so why say it?

[PeFe]

abc wrote

Mali has nailed SA's future to AUKUS and the US warhawks

we can't manufacture anything else because of energy prices

This quote comes from another thread but I will answer here.

What proof do you offer that "we can't manufacture anything else due to high electricity prices"?

Australia is regarded in general as a "high cost country".....high wages, high land prices, high energy prices, complex regulatory environment so the "formula" is a lot more complex than you suggest.

South Australia basically de-industrialized from the 70's onwards (Yes Mitsubishi happened later, and Holdens, but that was the tail end of the process)

In the 1970's South Australia's fuel source was all fossil fuels.....how did that help save our industries? It didn't.....

Renewables offer more hope for cheaper power than anything else....

In the last 30 days the wholesale price of power was as follows

Solar -$4.49 per mwh

Wind $47.08

Gas $111.46

Prices sourced from a website that tracks the wholesale price of electricity across the country

https://explore.openelectricity.org.au/ ... Simplified

[Spurdo]

This quote comes from another thread but I will answer here.

What proof do you offer that "we can't manufacture anything else due to high electricity prices"?

Australia is regarded in general as a "high cost country".....high wages, high land prices, high energy prices, complex regulatory environment so the "formula" is a lot more complex than you suggest.

South Australia basically de-industrialized from the 70's onwards (Yes Mitsubishi happened later, and Holdens, but that was the tail end of the process)

In the 1970's South Australia's fuel source was all fossil fuels.....how did that help save our industries? It didn't.....

Renewables offer more hope for cheaper power than anything else....

In the last 30 days the wholesale price of power was as follows

Solar -$4.49 per mwh

Wind $47.08

Gas $111.46

Prices sourced from a website that tracks the wholesale price of electricity across the country

https://explore.openelectricity.org.au/ ... Simplified

People have been promising this “renewables led manufacturing renaissance” for years now and literally nothing has ever come of it. We’ve got all these renewables and we’re even more of a rust-belt state than ever.

[abc]

This quote comes from another thread but I will answer here.

What proof do you offer that "we can't manufacture anything else due to high electricity prices"?

Australia is regarded in general as a "high cost country".....high wages, high land prices, high energy prices, complex regulatory environment so the "formula" is a lot more complex than you suggest.

South Australia basically de-industrialized from the 70's onwards (Yes Mitsubishi happened later, and Holdens, but that was the tail end of the process)

In the 1970's South Australia's fuel source was all fossil fuels.....how did that help save our industries? It didn't.....

Renewables offer more hope for cheaper power than anything else....

In the last 30 days the wholesale price of power was as follows

Solar -$4.49 per mwh

Wind $47.08

Gas $111.46

Prices sourced from a website that tracks the wholesale price of electricity across the country

https://explore.openelectricity.org.au/ ... Simplified

People have been promising this “renewables led manufacturing renaissance” for years now and literally nothing has ever come of it. We’ve got all these renewables and we’re even more of a rust-belt state than ever.

nail head

[rubberman]

This quote comes from another thread but I will answer here.

What proof do you offer that "we can't manufacture anything else due to high electricity prices"?

Australia is regarded in general as a "high cost country".....high wages, high land prices, high energy prices, complex regulatory environment so the "formula" is a lot more complex than you suggest.

South Australia basically de-industrialized from the 70's onwards (Yes Mitsubishi happened later, and Holdens, but that was the tail end of the process)

In the 1970's South Australia's fuel source was all fossil fuels.....how did that help save our industries? It didn't.....

Renewables offer more hope for cheaper power than anything else....

In the last 30 days the wholesale price of power was as follows

Solar -$4.49 per mwh

Wind $47.08

Gas $111.46

Prices sourced from a website that tracks the wholesale price of electricity across the country

https://explore.openelectricity.org.au/ ... Simplified

People have been promising this “renewables led manufacturing renaissance” for years now and literally nothing has ever come of it. We’ve got all these renewables and we’re even more of a rust-belt state than ever.

And when the private sector owners of the Northern Power Station shut it down and our prices went up in 2017, we were an economic powerhouse?

Prices are way higher than I'd like, but then you have to address your concerns to the private companies involved. Certainly those private companies are getting good wholesale prices from renewables. As for why they aren't passing that on to consumers is something you have to ask them.

I can understand people seeing that high prices aren't good for the rest of the economy, but that's hardly the concern of private companies selling electricity.

What I don't understand is why people thinking that complaining on the internet about those prices is going to have any effect on a private company whose job it is to make profits for shareholders. Further, I'm sure that if they thought it would make more money, private generation companies would be lobbying for coal, gas, nuclear, or whatever. However, they aren't.

[rev]

This quote comes from another thread but I will answer here.

What proof do you offer that "we can't manufacture anything else due to high electricity prices"?

Australia is regarded in general as a "high cost country".....high wages, high land prices, high energy prices, complex regulatory environment so the "formula" is a lot more complex than you suggest.

South Australia basically de-industrialized from the 70's onwards (Yes Mitsubishi happened later, and Holdens, but that was the tail end of the process)

In the 1970's South Australia's fuel source was all fossil fuels.....how did that help save our industries? It didn't.....

Renewables offer more hope for cheaper power than anything else....

In the last 30 days the wholesale price of power was as follows

Solar -$4.49 per mwh

Wind $47.08

Gas $111.46

Prices sourced from a website that tracks the wholesale price of electricity across the country

https://explore.openelectricity.org.au/ ... Simplified

People have been promising this “renewables led manufacturing renaissance” for years now and literally nothing has ever come of it. We’ve got all these renewables and we’re even more of a rust-belt state than ever.

Exactly.

Most people don't give a toss how low wholesale prices have fallen according to cherry picked figures, when their bills continue to go through the roof every quarter.

With every new renewable project we're told prices will come down. It never happens.
What people have seen is their standard of living plummet along with their power prices going through the roof, while we have a government who promised to fix the cost of living, promised to bring down power prices for us, but hasn't delivered either.

2025 election cant come soon enough.

[PeFe]

Electricity prices came down on July 1 2024.....not nearly enough in my opinion but still....

https://www.adelaidenow.com.au/news/sou ... 8b5bf83d93

[Spurdo]

Electricity prices came down on July 1 2024.....not nearly enough in my opinion but still....

https://www.adelaidenow.com.au/news/sou ... 8b5bf83d93

Not that any of us serfs will see even a single cent of those savings

[PeFe]

Electricity prices came down on July 1 2024.....not nearly enough in my opinion but still....

https://www.adelaidenow.com.au/news/sou ... 8b5bf83d93

Not that any of us serfs will see even a single cent of those savings

Retail prices came down on July 1......for the average consumer and small businesses!

https://www.9news.com.au/national/elect ... 1d08c653d1

[rev]

Electricity prices came down on July 1 2024.....not nearly enough in my opinion but still....

https://www.adelaidenow.com.au/news/sou ... 8b5bf83d93

Not that any of us serfs will see even a single cent of those savings

Retail prices came down on July 1......for the average consumer and small businesses!

https://www.9news.com.au/national/elect ... 1d08c653d1

The link you posted doesn't say prices HAVE come down, it says this, in the headline..
Electricity prices to drop for households and businesses in South Australia

And then it says this...
Electricity prices for South Australian households and businesses will drop more than expected over the next year.
The Australian Energy Regulator approved the reduction in the default market rate of 2.8 per cent, which will see the average household bill reduced by $63 next financial year, while an 8.8 per cent reduction for businesses should save about $512.

Adelaide mother-of-two Erin Dunstan, who saw a 50 per cent increase in her electricity bill last year, has welcomed relief today as prices dropped.


It says the regulator has approved a reduction in the default market rate. That doesn't mean the retailers are going to pass that saving on.
And even if they did, wowsers everyone hold on to your hats and make sure you're seated firmly, because that saving is a whopping $63 for the year.
.....If only quarterly bills increase by something similar, it might be something worth talking about.

50% increase mentioned in the article for one household for the year, but prices MIGHT come down by 2.8%...
And people are celebrating that?

You really can't be serious with this rubbish anymore....not aimed at anyone with that comment, but the overall situation.

[PeFe]

https://www.canstarblue.com.au/electric ... ices-2024/

I believe default offers change automatically when the energy regulatory makes a determination....ie the retailer must follow the regulators decision.

[rubberman]

Electricity prices came down on July 1 2024.....not nearly enough in my opinion but still....

https://www.adelaidenow.com.au/news/sou ... 8b5bf83d93

Not that any of us serfs will see even a single cent of those savings

True. However, I am not sure why people are complaining about it here. Generators, poles and wires, retailers are all privately owned. We might as well complain about the prices at Myers. Private companies aren't obliged to care about what we think.

As for governments, both parties are foolish promising to do much, given the ownership structures of most of the industry. Regulators can operate the market and provide a framework, but neither party has a credible way of reducing prices short of nationalisation...and that's costly too.

If people want to have a rant, here is as good a place as any I guess. However, I doubt that the private generators, distributors and retailers will take the slightest notice...and I have not seen any proposal from any party that's truly practical and likely to reduce prices.

[bits]

Both sides of government have been offering sizable subsidies for solar and battery installations to reduce household power prices.

It isn't available or suitable for everyone.

In 2022 44% of houses in SA had solar installed.

I have heard previously Roi for solar systems is often 3-4 years and the panels will continue to operate well for 20+ years. The inverter likely will need replacing before the panels.

The gov did also give everyone $75(I think?) credit on their power bill this year.