10.2% 2.5% FY19 to FY21

Transcription

1 POWER PRICES FALLING OVERALL RESIDENTIAL FY19 to FY % Rising 2.5% FY19 to FY21 GR FY19 to FY21 2.1% PO L Falling CHEME PR NS IC E E Rising ES Falling WIRES P AND RI S E S CE TION PRI CE ERA N E S LP ERAL RICES OV G The single biggest dive of pice in the next two yeas will be stuctual change in the wholesale geneation secto. Demand is elatively flat so wholesale costs ae being diven lowe by inceased supply fom enewables. 4.0% FY19 to FY21 Falling geneation costs ae offsetting slight ises in othe supply chain costs Bill = USAGE x PRICE Evey household is diffeent. Bills change depending on how much powe you use and when. Costs ae also affected by whee you live and govenment policy. OVERALL SUPPLY COSTS Most Austalians can expect to see falling electicity pices ove the next two yeas. Moe wind and sola is being built than eve befoe and it s diving pices down in the nea tem. Managing the costs of connecting new geneation will be a majo challenge in the yeas ahead. POLICY By 2020 aound 20% of powe will be supplied by enewables incentivised though LRET and state-based schemes.

2 RESIDENTIAL ELECTRICITY PRICE TRENDS AROUND THE NATION 2018 Most Austalians can expect to see falling electicity pices ove the next two yeas. All states in the national electicity maket ae expected to see falls - SA, VIC, TAS, NSW and south east Queensland. We estimate slight ises fo WA, ACT and NT. Saving fom switching to the lowest maket offe fom the lowest standing offe fo epesentative consume 254 NSW $293 ACT $286 SEQ $ 465 SA $357 VIC $ $156 SA WA 9.3% -$120 NT 2.7% SA 6.5% -$76 -$27 SEQLD 5.5% NSW NSW 2.1% $87 -$25 Legend Supply chain cost components of a typical bill Maket offe $47 Standing offe Wholesale Wholesale Netwoks Netwoks Envionmental Envionmental Residual Residual This epot s focus is on the dives of total bill tends. The esidual applies in most juisdictions. It includes opeating costs and magins. VIC 2.3% -$39 TAS 2.1% ACT 5.0%

3 AUSTRALIAN CAPITAL TERRITORY STANDING OFFER PRICES ARE RISING Afte a elatively small ise of 1.4% this yea, standing offe pices ae estimated to incease by 5.0% in total ove the next two yeas because of ising envionmental policy and egulated netwok costs. g e f f o s estimated pice 5.0% ACT to is e 21 19FY Sta nd in The most common electicity consume is a two-peson household consuming 7,151 kwh annually. In the ACT 68% of esidential electicity consumes ae still on standing offes $1693 $1717 $1697 $ Diect costs of govenment schemes like the enewable enegy taget 1700 Regulated netwok costs account fo 33.6% of the typical bill and ae expected to incease slightly ove the next two yeas due to ising tansmission and distibution costs. esidential custome 1900 Wholesale costs account fo 48.4% of the typical bill this yea and ae expected to put downwad pessue on bills in the next two yeas as moe enewable supply comes in to the maket and demand stays flat. But these falls in wholesale costs will be counte-balanced by inceases in both egulated netwok costs and envionmental costs. Envionmental policy costs included in customes bills ae the Commonwealth Govenment s enewable enegy taget (RET) and the ACT Govenment s feed-in-taiffs and its enegy efficiency impovement scheme. These schemes account fo 12.7% of the epesentative electicity standing offe and ae expected to put some upwad pessue on costs in the next two yeas. The incease in costs is pimaily diven by inceasing ACT feed-in taiff costs as the ACT appoaches its 100% enewable enegy taget. The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale spot and contact makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

4 NEW SOUTH WALES ELECTRICITY MARKET PRICES ARE DECREASING Afte being lagely flat this yea, pices ae expected to fall by 2.1% in total ove the next two yeas as moe enewable geneation dives costs down. es estimated to c i fal p lf ff e o 2.1% NSW Y1 Ma ke t The most common electicity consume is a two-peson household consuming 4,215 kwh annually in addition to having a gas mains connection. In NSW 83% of esidential electicity consumes ae now on maket offes. $1227 $1267 $1294 Regulated netwok costs account fo 46.9% of the typical bill and ae expected to incease slightly ove the next two yeas mainly due to ising tansmission netwok costs. esidential custome $1290 Wholesale costs account fo 38% of the typical bill offe this yea and ae expected to put downwad pessue on bills in the next two yeas as moe enewable supply comes in to the maket and demand stays flat. This downwad pessue outweighs ises in netwok and envionmental costs. Diect costs of govenment schemes like the enewable enegy taget Envionmental policy costs included in customes bills ae the Commonwealth Govenment s enewable enegy taget (RET) and the NSW Govenment s climate change fund and enegy savings scheme. These schemes account fo 6.5% of the epesentative electicity maket offe and ae expected to put some upwad pessue on costs in the next two yeas. Continued gowth in sola penetation and the consequent incease in costs fo the Commonwealth Govenment s small scale scheme is diving this cost pessue. The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale spot and contact makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

5 NORTHERN TERRITORY S RESIDENTIAL ELECTRICITY PRICES ARE INCREASING Afte an incease of 1% this yea, electicity pices ae expected to incease by 2.7% in total ove the next two yeas, attibutable to the annual incease pojected by the Nothen Teitoy Govenment. es ity pic estimat c i ed ct e to l e NT 2.7% -21 Y19 ef is Resid ent ial The most common electicity consume is a household consuming 6,613 kwh annually. Residential electicity pices in the Nothen Teitoy ae set by the Nothen Teitoy Govenment, which subsidises electicity pices so that the pices paid by consumes ae less than the cost of supply. esidential custome 1800 $1711 $1730 $1747 Wholesale costs elating to the opeation of the Dawin-Katheine powe system account fo 56.7% of the typical bill this yea and ae expected to incease slightly in the next two yeas putting upwad pessue on electicity pices. Regulated netwok costs account fo 51.2% of the typical bill this yea and ae expected to emain elatively flat fo the next two yeas. $ Diect costs of govenment schemes like the enewable enegy taget Envionmental costs in customes bills ae a esult of the Commonwealth Govenment s Renewable Enegy Taget which accounts fo 5.1% of the epesentative etail bill. Envionmental policy costs ae expected to incease in the next two yeas diven by continued gowth in sola penetation and the consequent incease in costs fo the Commonwealth Govenment s small scale enewable scheme The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

6 SOUTH AUSTRALIA S ELECTRICITY MARKET PRICES ARE DECREASING Afte a fall of almost 2% this yea, maket pices ae estimated to fall again by 6.5% in total ove the next two yeas as moe enewable geneation dives costs down. es estimated to c i fal p lf ff e o 6.5% SA Y1 Ma ke t The modelled electicity consume is a household consuming 5,000 kwh annually. In South Austalia 89% of esidential electicity consumes ae now on maket offes. $1889 $ $1779 Regulated netwok costs account fo 41.2% of the typical bill this yea and ae expected to put upwad pessue on costs in the next two yeas. This incease is diven by inceasing tansmission and distibution costs. $ Diect costs of govenment schemes like the enewable enegy taget esidential custome 1900 Wholesale costs account fo 46.1% of the typical bill this yea and ae expected to put downwad pessue on bills in the next two yeas as moe enewable supply comes in to the maket and demand stays flat. Analysis estimates that these falls will outweigh inceases in egulated netwok costs and flat envionmental policy costs. Envionmental policy costs in customes bills include the Commonwealth Govenment s enewable enegy taget (RET) and the state govenment s sola feed-in taiffs and the etaile enegy efficiency schemes. These schemes account fo 8.4% of the epesentative electicity maket offe and ae expected to be elatively flat in the next two yeas. Continued gowth in sola penetation and the consequent incease in costs fo the small scale enewable enegy scheme ae diving this cost pessue. The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

7 SOUTH EAST QUEENSLAND S ELECTRICITY MARKET PRICES ARE DECREASING Afte a fall of almost 7% this yea, pices ae estimated to fall again by 5.5% in total ove the next two yeas as moe enewable geneation dives costs down. Wholesale costs account fo 33% of the typical bill this yea and ae expected to keep putting downwad pessue on bills in the next two yeas as moe enewable supply comes in to the maket and demand stays flat. The new enewable supply includes the appoved pojects unde the Queensland Govenment s Sola 150 poject. es estimated to c i fal p lf ff e o Y1 Ma ke t SE QLD The most common electicity consume is a two-peson household consuming 5,240 kwh annually. In south east Queensland 81% of esidential electicity consumes ae on maket offes. esidential custome Regulated netwok costs account fo 46% of the typical bill and ae expected to emain faily flat ove the next two yeas in esponse to lowe distibution netwok costs. $1476 $1375 $1295 $1299 Diect costs of govenment schemes like the enewable enegy taget 5.5% In and the annual bill paid by the epesentative consume is the amount afte emoval of the Queensland Govenment ebate of $50 each yea. Envionmental policy costs included in customes bills ae the Commonwealth Govenment s enewable enegy taget (RET). The RET shemes account fo 6% of the epesentative electicity maket offe and ae expected to incease in the next two yeas. Continued gowth in sola penetation and the consequent incease in costs fo the Commonwealth Govenment s small scale scheme is diving this cost pessue. The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

8 TASMANIA S STANDING OFFER PRICES ARE DECREASING Afte a elatively small incease of 2% this yea, esidential pices ae estimated to fall by 2% in total ove the next two yeas as moe enewable geneation dives costs down. ices estimated to p fal ffe o l g 2.1% FY Sta nd in The most common electicity consume is a household consuming 7,908 kwh annually. Residential electicity pices in Tasmania ae set by the deteminations of the Tasmanian Economic Regulato and ae capped by the Tasmanian Govenment so that they can t incease by moe than CPI each yea, until. Most customes ae on a standing offe. esidential custome TAS $1868 $1906 $1838 Wholesale costs account fo 35.5% of the typical bill this yea and ae expected to put downwad pessue on bills ove the next two yeas as moe enewable supply comes in to the maket and demand stays flat. Analysis estimates that these falls will outweigh inceases in egulated netwok costs fom to. Regulated netwok costs account fo 44.1% of the typical bill this yea and ae expected to put upwad pessue on costs in the next two yeas. This incease is diven by inceasing distibution costs. $ Diect costs of govenment schemes like the enewable enegy taget Envionmental costs in customes bills ae a esult of the Commonwealth Govenment s Renewable Enegy Taget which accounts fo 8.4% of the epesentative standing offe. These costs ae expected to incease in the next two yeas diven by inceasing costs fo the Commonwealth Govenment s small scale scheme The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale spot and contact makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.

9 VICTORIA S ELECTRICITY MARKET PRICES ARE DECREASING Afte a fall of aound 3.2% this yea, pices ae estimated to fall again by 2.3% in total ove the next two yeas as moe enewable geneation dives costs down. Wholesale costs account fo 43.9% of the typical bill and ae expected to keep putting downwad pessue on bills in the next two yeas as moe enewable supply comes in to the maket and demand stays flat. ices estimated to p fal e l off 2.3% VIC FY Ma ke t The most common electicity consume in Victoia is a two-peson household consuming 3,865 kwh annually and with a gas connection. In Victoia 94% of esidential electicity consumes ae on a maket offe. Victoian household 1150 $1060 $ Regulated netwok costs account fo 40.1% of the typical bill and ae expected to emain stable ove the next two yeas. Diect costs of govenment schemes like the enewable enegy taget $1096 $ Envionmental policy costs in customes bills include the Commonwealth Govenment s enewable enegy taget (RET) and the State Govenment s feed-in-taiffs and enegy upgades scheme. These schemes account fo 7.2% of the epesentative electicity maket offe and ae expected to emain stable RECENT ANNOUNCEMENTS The AEMC s estimate of the change in the standing offe etail pice fom 2018 to 2019 is within the ange announced by EnegyAustalia, AGL, and Oigin on 30 Novembe Ou estimate was standing offe pices would decease by 1.5%, while ecent announcements included: AGL decease of 1.6% and both EnegyAustalia and Oigin flat at 0%.

10 WESTERN AUSTRALIA S RESIDENTIAL ELECTRICITY PRICES ARE INCREASING SLIGHTLY Afte a 7% incease this yea, pices ae expected to incease by a futhe 9% in total ove the next two yeas. Annual pice changes ae set by the Westen Austalian Govenment. Wholesale costs in the Westen Austalian Maket (WEM) account fo 40.8% of the typical bill this yea and ae expected to continue to incease in the next two yeas diven by highe gas and coal pices. Changes in esidential demand elated to inceased penetation of ooftop sola ae also contibuting to an incease in wholesale costs. e ity pic s estimat c i ed ct to ele WA -21 Y19 ef is Resid ent ial Pices will change in line with WA budget announcement in Decembe The most common electicity consume is a household consuming 5,198 kwh annually. Residential electicity pices ae set by the Westen Austalian govenment and may not eflect the undelying cost of the supplying electicity. Regulated netwok costs account fo 46.7% of the typical bill this yea and ae expected to incease based on the latest Access Aangements fom the Westen Austalian Economic Regulation Authoity (ERA). esidential custome $1566 $1676 $1769 $1831 Diect costs of govenment schemes like the enewable enegy taget 1600 Envionmental costs in customes bills ae a esult of the Commonwealth Govenment s Renewable Enegy Taget which accounts fo 4.4% of the epesentative esidential bill. Envionmental policy costs ae expected to contibute to upwad pessue on costs in the next two yeas diven by continued gowth in sola penetation and the consequent incease in costs fo the Commonwealth Govenment s small scale enewable scheme. The pice tends epot is a coe document used to infom a ange of stakeholdes including the Austalian Enegy Maket Opeato, the Intenational Enegy Agency and the Reseve Bank of Austalia. It helps consumes undestand costs included in thei electicity bill. It also povides govenments with infomation they need to undestand changes in electicity pices and povides context fo long-tem decision making on enegy policy. Pice tends identified in this epot ae not a foecast of actual pices, but athe ae a guide to picing and bill diections based on cuent expectations, policy and legislation. Actual pice movements will be influenced by how etailes compete, the dynamics of wholesale makets, the outcomes of netwok egulatoy decisions, and changes in policy and egulation.