Wholesale power prices hit nine-year low

·1-min read

A drop in wholesale electricity prices is expected to flow through to household and business power bills.

New data from the Australian Energy Market Operator shows average quarterly wholesale electricity prices have fallen to their lowest level in nine years.

The agency's Quarterly Energy Dynamics report showed Victoria experienced the largest fall in prices from $79/MWh in the first quarter of 2020 to $25/MWh in the first quarter of 2021.

In NSW, prices fell to $38/MWh, down from $86/MWh in the corresponding quarter in 2020, while Queensland averaged $43/MWh.

"With wholesale costs making up around a third of residential electricity bills and far more for industry, the government expects these price falls be passed on to Australian families and businesses," Energy Minister Angus Taylor said.

Mr Taylor put the price fall partly down to the introduction of the so-called "big stick" laws.

Emissions from the electricity sector across the national energy market were nine per cent down on the corresponding quarter last year.

However, they were three per cent higher than the previous quarter's record low.

Key contributors included very low operational demand and significant increases in energy created by renewables, resulting in lower coal-fired generation.

Compared to the fourth quarter of 2020, quarterly average gas prices increased slightly in all east coast gas markets except in Victoria, which remained steady.

There was diminished demand for gas-powered generation, representing the lowest quarter since 2005.