Why could power bills rise by 35 per cent next year?

Derick Martins - National Renewables Manager - Solar Energy Australia

Electricity prices could rise by 35%

Electricity prices could increase
Retail electricity prices may increase by more than 35 per cent next year.

Outside the Loy Yang B power station.
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When it comes to wholesale prices, it said wholesale spot prices had increased sharply in the national electricity market in 2022, and contract prices for 2022 and 2023 had increased in line with spot prices, particularly in Queensland and New South Wales.

That would have implications for residential electricity bills.

“It is expected that spot and contract prices will remain high, due to the unknown impact and timing of further coal closures and international pressures,” AER warned.

It said higher inflation would also increase costs, and higher interest rates — which are being used to try to squash inflation — could feed through to higher electricity prices as well.

“In coming years, high inflation outcomes will flow through to network costs, and we are seeing evidence of increasing interest rates that may translate to higher required costs for network capital-raising. In combination, they will pose continued pressures on electricity prices,” it noted.

How long does the regulator think prices will remain high for?

“Looking beyond 2022–23, it is difficult to forecast retail costs, but they are expected to remain relatively high over the next two years,” it predicted.

And that wasn’t all.

Derick Martins

National Renewables Manager - Solar Energy Australia