Why electricity prices have gone up and 4 ways to protect yourself
The Australian Energy Market Operator (AEMO), in its National Electricity Market (NEM) snapshot, said wholesale costs soared 141 per cent in the first quarter of 2022 compared with the same period last year.
This announcement is particularly worrying for households without solar, who are set to experience energy bill shock, with a significant increase in wholesale electricity prices being passed on by retailers to consumers.
“Increases in electricity prices create even more problems for consumers who rely solely on the grid for their energy,” says Stephen Cranch, General Manager of Solahart Australia.”These inflationary pressures have resulted in energy retailers passing cost increases on to households, contributing to an even higher cost of living.”
Why have electricity prices gone up in Australia?
There are two key reasons why electricity prices are rising:
- Demand overtaking supply: Supply has been affected by ageing coal-fired power stations being closed down for maintenance. Also, it has been a very cold start to the 2022 winter season on the east coast in particular, which drives greater demand.
- Russia-Ukraine war: “Normally coal-fired plants being closed down for maintenance would not be so much of an issue as the backup gas-fired plants would be on hand to make up the shortfall, says Stephen.
“However, the European demand for Australian gas is high due to the energy crunch caused by the Russia-Ukraine war.”