Power prices are set to hike, as if we needed another thing weighing on our mind. I don’t think we’ve ever needed a society-wide dip in a sensory deprivation tank more. Preferably one not run on electricity, apparently.
Essentially the issue is to do with wholesale electricity. What’s that you ask? Well, wholesale electricity is the price which power retailers pay for the electricity they provide their customers with. Alas, no it’s not just a Costco for electricity.
Wholesale electricity prices have more than doubled over the last 12 months according to a report by the Australian Energy Market Operator (AEMO). Great!
The report also said Aussies could see a $100 increase in energy bills after the Federal Election. As if an election wasn’t enough to worry about.
Energy bills are boring and stressful, making them the least chic of household expenses. In my mind electricity is just like money — essentially fake.
Finder’s latest Consumer Sentiment Tracker also found one in five Aussies reckon their energy bill is one of the expenses which causes them the most stress. Maybe we should all go back to our candle era? Embrace the witchy vibes.
So the power prices are hiking, the lights are switching, my supply of Kmart candles is growing and my scent-induced headache is growing.
But why exactly is power getting more expensive?
There are a couple of reasons. Energy company ReAmped told The Daily Telegraph Russia’s invasion of Ukraine and the demand for oil, gas and coal as part of COVID recovery both played a big role.
It almost seems like maybe… just maybe… we should be reducing our reliance on gas and coal then?
Director of the Victoria Energy Policy Centre for Victoria University Bruce Mountain broke down some of the issues in a piece for The Conversation. He pointed out one of the reasons electricity is costing more is because coal and gas is also costing more. Funny that!
According to Mountain, the best way of stopping these big ‘ol surges in cost is to increase how much low-cost wind and solar energy we’re using. He pointed out the example of South Australia (go off!).
Two thirds of its electricity came from “variable renewable generation” (aka wind, tidal, hydroelectric and solar energy) by 2021. Plus by 2021, South Australia had one of the lowest wholesale prices in the National Electricity Market.
But if you don’t live in SA, it’s not looking great.
One Big Switch’s campaign director Joel Gibson told 9News different energy retailers would be impacted in different ways.
“Retailers are being very cagey about price hikes but they’re coming,” he said.
Now that’s bloody ominous.