Radio host Ben Fordham has criticized Prime Minister Anthony Albanese and Energy Minister Chris Bowen for rising energy costs.
The 2GB presenter told listeners on Wednesday that he hoped they were sitting down as he broke the news that their energy bills are likely to “skyrocket”.
He referred to new figures from the Australian Energy Market Operator which showed wholesale prices averaged $133/MWh this June quarter across the National Energy Market, which was 23 per cent higher than $108 /MWh in the same quarter last year. The National Energy Market does not serve customers in Western Australia or the Northern Territory.
“This is worrying news because wholesale prices set retail prices, so when wholesale prices go up 23 percent, you can expect your energy bill to go up 23 percent,” he said. Fordham on his radio show.
“Can you handle this? Currently, the average annual energy bill is about $1,300.
“So, if we are right and [household] energy bills rise by another 23 per cent, the average energy bill in Australia will rise to $1600. Households will increase by another $300 per year.”
The Australian Energy Market Operator (AEMO) noted low wind and reduced rainfall in southern regions where hydro generation is heavily concentrated meant reduced electricity supplied by wind (-20 per cent) and hydro (-18 per cent) , while gas (+16 percent) and black coal (+7 percent) increased.
Fordham described the data as showing that gas and coal-fired power generation had “shrunk” to keep Australia running and criticized governments he said had “braked new projects” for the former and “demonized” the latter.
“Under Chris Bowen’s leadership, energy bills haven’t gone down by $275 as Anthony Albanese promised, they’ve gone up by about $300 and now the bad news is they’re going to get worse,” he said.
The $275 pledge refers to Labour’s election promise to cut electricity bills by $275 by 2025. Mr Albanese had said increasing renewable energy was the “best way” to bring those bills down.
Fordham warned: “If you’re already struggling with your energy bills, avoid the letterbox or letterbox because I’m sorry to say there’s bad news coming.”
But Mr Bowen’s office argued that it was not increased reliance on renewables that was driving up prices and was actually doing the opposite.
“The data shows that renewables provide cheaper energy, and when we are forced to rely on coal-fired generation and aging unreliable assets, it drives up prices,” a spokeswoman for Mr Bowen said.
“The sooner we can get more reliable renewables into the system, the better it will be for energy bills and energy reliability.”
The statement from Mr Bowen’s office took aim at the coalition’s controversial nuclear power plan.
“Peter Dutton’s nuclear vs renewable plan ignores the need for more reliable, low-cost energy supply now,” the government spokeswoman said.
“Instead, he wants to stop new cheap, clean renewable generation and push our aging, increasingly unsafe fleet of coal-fired power generation for another two decades, if he can be able to build a small amount of nuclear power.
“Ultimately it will be the Australian taxpayer who pays for its nuclear joy with higher taxes and higher bills.”
The spokeswoman said the government was helping companies build “cheap and clean renewables by 2030, as well as massive amounts of new battery storage capacity to put downward pressure on prices”.
“We’re already seeing batteries do about twice as much heavy duty this quarter than the same time last year,” she said.
The government announced in May that it will provide a $300 rebate on the energy bill for all Australian households. Loans will be applied in quarterly installments from July 1, 2024.
Low wind speed and decreasing precipitation
AEMO CEO Daniel Westerman said low wind speeds and reduced rainfall in the June quarter (Q2, 2024) came at a time when cold weather was boosting demand for electricity.
“The colder weather has brought a new record for total electricity demand in the National Energy Market for the June quarter,” he said.
“On the east coast we have seen continued low and cold temperatures, particularly in Victoria, which have brought higher morning peak demand in late autumn and the first month of winter.
“Prolonged periods of low wind have led to reduced wind generation output, which was down 20 percent from last winter to a quarterly average of 2,657 MW, with wind availability at its lowest levels since the quarter second 2017.”
Mr Westerman said hydrogen generation also generated less during the quarter, averaging 1,607 MW, an 18 per cent reduction from last year and the lowest output for a second quarter since 2017.
“These market conditions highlight the important role that batteries, pumped hydro and flexible gas generation will play as renewable generation becomes more dominant in Australia’s electricity grids,” he said.
“The role of batteries in supporting morning and evening peak demand became more prominent, with average generation in those periods more than doubling from last year, reflecting significant increases in battery capacity.”
Australian Energy Regulator board member Jarrod Ball explained that many factors contributed to the rise in prices during the quarter.
“While we expect to see wholesale prices rise as the weather in southern states cools and demand increases to keep people warm, the combined impact of the cold, planned and unanticipated grid outages, combined with re-bidding and lower solar and wind output has pushed up electricity prices. higher than this time last year,” he said.
The Energy Regulator announces lower price caps
The Australian Energy Regulator’s (DMO) final default market offer – a price cap to ensure customers get the lowest possible price – was published in May, reducing the maximum amount electricity retailers can buy charge households in NSW by $28 to $2499 and South Australia by $63 to $2216 from July 1.
These figures do not include the $300 home energy rebate, which means bills will be another $300 lower than the default price.
While the default offer in south-east Queensland has increased by $83 to $2052, this increase will be more than offset by the federal government’s rebate and an additional $1000 subsidy announced by the state Labor government.
In Victoria, where the default market supply is set separately by the state’s Essential Services Commission, household prices will fall by as much as 5.7 per cent, or $100, to $1,655, before the $300 cut is applied.
In each state, between 8 and 12 percent of households are enrolled in the default market offering, representing almost 500,000 customers.
However, the default offer will indirectly affect many more households as major retailers, such as Origin Energy and AGL, use state-specific limits as a benchmark to determine the final prices set for the rest of their customers.
– with NCA NewsWire