November 22, 2017 Read More →

Report: Renewables Will Drive ‘Steep Decline’ in Australian Electricity Prices

The Guardian:

Modelling commissioned by the Turnbull government as part of its efforts to back in the national energy guarantee says renewables will drive the first wave of price reductions under the policy. It also floats substantial regulatory intervention to stop the electricity market becoming even more concentrated.

The work by Frontier Economics, obtained by Guardian Australia, says a steep decline in wholesale electricity prices forecast between 2018 and 2022 is due to the entry of 6,000MW of renewable capacity which has already been incentivised by the existing renewable energy target.

It also acknowledges that the policy, which imposes new reliability and emissions reduction guarantees on energy retailers and large energy users from 2020, could also lead to further market concentration in states like South Australia.

The assessment notes that in order to meet their obligations under the Neg, electricity retailers can either contract for supply externally, or integrate vertically with generators, which could be more “cost-effective than external contracting”.

It notes this is a factor particularly in South Australia “where a high degree of concentration and vertical integration already exists.

More: Renewables will drive ‘steep decline’ in wholesale electricity price in Australia – report

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