There are new warnings that electricity could rise by 50 percent over the next two years and gas prices could double.
Because while the threat of blackouts is shrinking, industry analysts say international competition for coal and gas will keep generation costs high and hurt consumers.
There are new warnings that electricity could rise by 50 percent over the next two years and gas prices could double. (Getty Images / iStockphoto)
“We’re currently in the pan and if we’re lucky we’ll be out in the slow cooker for the next two months,” warned Tennant Reed of the Australian Industry Group.
“Over the next two years, households are likely to pay 50% more for their electricity and potentially double that for their gas.”
The wholesale price of electricity accounts for about one-third of the retail bill.
Last year, the average price of wholesale electricity on the East Coast was below $ 50 per megawatt hour.
By early 2022 it had risen to $ 87 per megawatt hour.
When for seven days in June it breached a $ 1,300 ($ 1,359 per megawatt hour) threshold, the market operator limited it to $ 300 and then closed the market.
But the regulated price, $ 300, has yet to be paid.
And futures markets are already setting prices for next year.
“We’re now looking at futures prices for electricity of 150 megawatts per hour or more in NSW and Queensland and close to other states,” Reed said.
“The price of gas used to be $ 3 or $ 4 a gigajoule,” he said
“We’re looking for $ 30 to $ 40 a gigajoule now.”
This sounds like the death knell for some energy-intensive companies.
“Businesses are starting to collapse,” said Lindsay Partridge, the country’s largest construction provider, Brickworks.
The federal government blames its predecessor for not advancing more rapidly on renewable energy and still claims it can cut electricity prices for average households by $ 275 in this government term.
Employment Minister Tony Burke said they are maintaining the model for getting cheaper energy on the grid.
Completely compensating the most vulnerable consumers for the rising price of electricity would have a huge cost, up to $ 6 billion over the next three years, money that no government has.