Australia’s energy market is on the rebound, according to Federal Energy Minister Josh Frydenberg.
In an opinion piece published in the Australian Financial Review on Wednesday, Mr Frydenberg said the country’s high power prices are hurting households and businesses.
“There is good news, however, that a record wave of 6000MW of new generation is coming online, putting downward pressure on prices,” he said.
“Alinta cut its power prices by around 3 per cent in January and last week Powershop followed with a 5 per cent cut worth $70 a year to customers.
“There are further falls to come with the ASX futures market for 2018 New South Wales electricity contracts down 26 per cent from last year and a further fall priced in for 2019.
“The forward curve for Queensland, Victoria and South Australia shows similar falls.”
Mr Frydenberg said the implementation of the National Energy Guarantee (NEG) would also have a significant impact on the wholesale market.
“By integrating for the first time energy and climate policy, we will have a mechanism that will bring more certainty for investment and at the same time put a premium on reliability which is needed to address the volatility plaguing South Australian and Victoria,” he said.
“Alarmingly, so far in 2017-2018 prices have spiked above $5000 a MWh nine times in South Australia and six times in Victoria, but nowhere else in the National Electricity Market.
“The Commonwealth’s investment in Snowy 2.0, pumped hydro in the Upper Spencer Gulf, a solar thermal plant in Port Augusta and battery projects across the Yorke Peninsula in South Australia will all help address this volatility.”
Mr Frydenberg said the federal government remained determined to get consumers a better deal from their retailers by “simplifying the offerings and empowering the public” with more than 1.6 million customers contacted by retailers to notify them of contracts ending.
“While our work on reforms to wholesale, network and retail markets continues apace, one thing is certain: ‘disruption’ is the byword for energy markets today,” he said.
“We are constantly investing and planning for the application of new technologies be they smart grids, demand response, hydrogen fuel cells as storage or the impact of electric vehicles on the network.
“These technologies are already bringing benefits to consumers as AEMO’s successful use of demand response this summer shows.
“As the federal Energy Minister, I see my role not as one to stop this exciting and dramatic technology-led transition, but rather to effectively manage it to deliver a more affordable, reliable and lower emissions energy future.”