Power price drops unlikely for Australian consumers in fragmented energy market

admin ETU National

MEDIA RELEASE: Monday 9 December, 2019

Australians are unlikely to see any drop in their household power bills even as renewable energy drives wholesale prices down, the Electrical Trades Union of Australia says.

ETU National Secretary Allen Hicks said Energy Minister Angus Taylor and his government’s attempts to swipe credit for price drops forecast in the Australian Energy Market Commission report were farcical.

“For the Energy Minister of a Government which has had no energy policy for seven years to turn around and claim credit for price reductions is a joke. Angus Taylor would have more credibility taking credit for Mr and Mrs Smith winning the Lotto this weekend.

“This government has in no way contributed to the predicted fall in wholesale prices. The price drops shown in the AEMC report are largely because state and territory governments have independently implemented their own renewable energy targets.

“Every Australian state and territory has a renewable energy target of at least 50 percent and plans for zero net emissions by 2050, consistent with the Paris Agreement. This is in defiance of the Federal government’s ideologically-driven failure to deliver any form of energy policy.

“We’re seeing prices dropping because renewable energy generation is cheaper than fossil fuel alternatives — coupled with improvements to efficiency capping growth in demand.

“But most Australian households will never even benefit from this drop, because of the privatised and fragmented nature of our energy market. The numbers in the AEMC report forecast a drop in wholesale energy prices, but there is no mechanism in place requiring privately-operated retailers pass on cheaper prices to consumers.

“Just today, Energy Australia ran full page newspaper ads urging customers to 'beat the price rise' and 'get this year's energy prices in 2020'. Whose prediction do you think is likely to be right — an AEMC forecast, or the companies setting prices and profiting from them?”

“Unless the private retailers choose to pass them on, wholesale price drops, presuming they even happen, would only find their way to energy consumers if governments compel them to, said Mr Hicks.

“In Queensland prices have fallen because the government quickly intervened to counteract concerning conduct in some of the generators’ activities. But without public intervention, retailers aren’t obliged to pass on savings.

“Even in the AEMC report you can see it's the states with majority public ownership who look set to get the biggest windfall.

“If this government is serious about lowering prices they need to be talking about public asset ownership and investment in renewables. In the meantime, Angus Taylor can tell us how exactly he expects to see these wholesale price drops passed on to consumers.”

Media enquiries: ETU National Communications Coordinator – Zoe Power

0419 499 886, [email protected]

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