Radio presenter Ben Fordham has criticised Prime Minister Anthony Albanese and Energy Minister Chris Bowen for rising energy costs.
The 2GB presenter told listeners on Wednesday that they should sit down and listen as he told them that electricity bills were likely to “skyrocket”.
He cited new figures from the Australian Energy Market Operator, which showed wholesale prices on the National Energy Market averaged $133/MWh in the June quarter, up 23 per cent from $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 determine retail prices,” Fordham said on his radio show. “If wholesale prices go up 23 percent, you can expect your electric bill to go up 23 percent as well.”
“Can you afford it? The average annual electric bill is currently around $1,300.
“So if we are right, [household] A 23 per cent rise in electricity prices would push the average Australian electricity bill to $1,600 – an extra $300 per household per year.”
The Australian Energy Market Operator (AEMO) said electricity supplied by wind (-20%) and hydro (-18%) fell in the southern region, where hydro generation is concentrated, due to weaker wind and less rainfall, while gas (+16%) and black coal (+7%) increased.
Fordham said the data showed that gas and coal had “created room” to run Australia, and criticised the government for “suppressing new projects” for the former and “demonising” the latter.
“Under Chris Bowen's leadership, instead of going down to $275 as Anthony Albanese promised, our rates went up by about $300 and now the bad news is that rates are going to get worse,” he said.
The $275 pledge refers to Labor's election pledge to cut household electricity bills by $275 by 2025. Mr Albanese said increasing renewable energy was the “best way” to reduce those bills.
“If you’re already struggling with your electric bill, avoid your mailbox or inbox because there’s bad news coming,” Fordham warned.
But Bowen's office argued that increased reliance on renewable energy is not driving up prices; in fact, the opposite is happening.
“The data shows that renewables provide cheaper electricity, and when we have to rely on coal and older, unreliable assets, prices go up,” Bowen’s spokesman said.
“The sooner we can introduce more reliable renewable energy into the system, the better it will be for energy costs and energy security.”
A statement from Bowen's office criticised the coalition government's controversial nuclear energy plans.
A government spokesman said: “Peter Dutton's anti-renewables nuclear plan ignores the need for cheaper and more reliable energy supplies now.”
“Instead, he wants to pause on cheap, clean renewables and push ahead with an aging and increasingly unreliable coal-fired power fleet for another 20 years. He sees an opportunity to build a small amount of nuclear power.
“Ultimately, Australian taxpayers will pay for this nuclear hoax with higher taxes and higher bills.”
The spokesperson said the government was helping companies “build cheap, clean renewable energy by 2030 and is also building massive new battery storage capacity to bring down prices”.
“We’re already seeing batteries do twice as much work this quarter compared to the same time last year,” she said.
The government announced in May that every Australian household will receive a $300 energy bill discount. The credit will be applied quarterly from 1 July 2024.
Wind speed is weak and precipitation is reduced
AEMO CEO Daniel Westermann said the lower wind speeds and rainfall in the June quarter (Q2/2024) were a result of colder weather driving up electricity demand.
“Cold weather pushed total electricity demand across the national energy market to a new record in the June quarter,” he said.
“The east coast experienced low temperatures and persistent cold spells, while Victoria in particular saw increased morning peak demand during the end of autumn and the first month of winter.
“A prolonged period of low wind speeds reduced wind power output, averaging 2,657 MW for the quarter, down 20% from last winter, and wind availability fell to its lowest level since the second quarter of 2017.”
Mr Westermann said hydropower generation also declined in the quarter, averaging 1,607 MW, down 18% from last year and the lowest output in a second quarter since 2017.
“These market conditions highlight the important role that batteries, pumped hydro and flexible gas generation will play as renewables become more dominant on Australia’s power grid,” he said.
“The role of batteries in supporting morning and evening peak demand has become more prominent, with average power generation during that period more than doubling since last year, demonstrating significant increases in battery capacity.”
Australian Energy Regulator Commissioner Jarrod Ball said a number of factors had contributed to the price rise this quarter.
“We had expected wholesale prices to rise as the weather in the Southern states got colder and people started to demand more to stay warm, but the combination of cold weather, planned and unexpected network outages, re-bidding, and reduced solar and wind generation has pushed up electricity prices compared to the same time last year,” he said.
Energy regulator announces price cap cut
The Australian Energy Regulator’s Final Default Market Offer (DMO) is a price cap designed to ensure customers get the lowest possible price and was announced in May, reducing the maximum amount electricity retailers can charge a household by $28 to $2499 in NSW from July 1, and by $63 to $2216 in South Australia.
This figure does not include the $300 home energy rebate, making it $300 cheaper than the base price.
The basic allowance in southeast Queensland has risen by up to $83 to $2,052, but the increase will be more than offset by the federal government's rebate and an additional $1,000 subsidy announced by the Labor state government.
In Victoria, the State Essential Services Commission sets its own basic market price, which will see the price per household fall by up to 5.7 per cent, or $100, to $1,655 before the $300 cut takes effect.
In each state, 8 to 12 percent of households are enrolled in the basic market offer, representing nearly half a million customers.
However, the default price will indirectly affect many households as major retailers such as Origin Energy and AGL use the weekly cap as a benchmark to determine the final price charged to the rest of their customers.
– With NCA NewsWire
