Premier Anthony Albanese has come under fire for failing to deliver on promised cuts in energy bills amid fears they could skyrocket further as the cost of living crisis hits the country.
Wholesale power costs for the June quarter rose 23 percent from the same period last year, according to data from the Australian Energy Market Operator.
The increase was driven by lower renewable energy production and cuts at older coal-fired generators as government policy shifts away from the cheapest energy source for environmental reasons.
The wholesale increase will not be felt immediately by consumers, but will significantly increase annual bill prices at the next default market offering on July 1, 2025.
Ben Fordham 2GB criticised Chris Bowen, the Minister of Climate change and Energy, and Mr. Albanese on price increases.
“Under Chris Bowen’s leadership, electric bills have not gone down by $275 as Anthony Albanese promised,” Fordham said.
“When wholesale prices rise by 23 percent, you would expect your electricity bill to rise by the same amount. Can you afford that?
‘The average annual electricity bill is about $1,300, so if we’re right and electricity bills rise another 23 per cent, the average electricity bill in Australia will skyrocket to $1,600.’
The Albanese government introduced a $300 rebate on energy bills from July 1, although critics argued that such rebates only reduce pressure on energy companies to lower prices and also fuel inflation.
Ben Fordham has criticised Anthony Albanese for his promise to cut energy bills, as Australian households face new threats of higher energy costs.
Fordham criticised Bowen for “preaching to everyone” about the virtues of renewable energy when the resulting higher bills were crippling many at a time when food prices were soaring and mortgage and rent costs were rising.
“Their electric bills could go up another $300, and Mr. Bowen still thinks he’s in a position to lecture others on energy policy,” Fordham said.
‘If you’re already struggling with your electricity bills, avoid your inbox or mailbox, because I’m sorry to say there’s some bad news coming.’
Fordham also criticised Bowen for “demonising” coal-fired power, pointing out that it rose 7 per cent in the June quarter and provided six times more energy than wind farms.
“Our coal-fired power plants were operating at about 80 percent capacity,” Fordham said.
“So evil coal, as they like to describe it, has been filling the gap and working overtime to keep Australia running. The same energy source that has been demonised by Energy Minister Chris Bowen.”
While pro-renewables and anti-coal energy policy was designed to reduce global warming, the latest wholesale price increase was driven, ironically, by record electricity demand during a very cold June quarter.
“On the east coast, we have seen persistent low temperatures and cold snaps, particularly in Victoria, which have driven higher morning peak demand into late autumn and the first month of winter,” AEMO chief executive Daniel Westerman said.
‘Prolonged periods of low wind have led to a reduction in wind power production, which fell 20 percent from last winter to a quarterly average of 2,657 megawatts, and wind availability fell to its lowest levels since the second quarter of 2017.
“These market conditions highlight the important role that batteries, pumped hydro and flexible gas generation will play as renewable generation becomes more dominant on Australia’s electricity grids,” Westerman said.
AER board member Jarrod Ball said a perfect storm of challenges had caused wholesale prices to rise further.
“While we would expect to see wholesale prices rise as the weather in southern states cools and demand increases to keep people warm, the combined impact of cold snaps, planned and unplanned grid outages, combined with new tenders and lower solar and wind production, has driven electricity prices higher than this time last year,” Ball said.
Fordham criticised Albanese (left) for failing to deliver on his promise to cut energy bills by $275 and also attacked Chris Bowen, Australia’s Minister for Climate Change and Energy, (right) for “demonising” coal power.
The weak performance of renewable energy led to a return of coal-fired power generation, which rose 7 percent and gas-fired generation 16 percent.
The Australian Gas and Pipeline Association warned that the winter’s “rolling drought” demonstrated the need for reliable backup.
The industry body called for gas-fired generation to be included in the Capacity Investment Plan (a national framework for subsidising wind, solar and battery projects) to ensure system security can be maintained.
The disruptions to generators and the grid also created the opportunity for some market participants to “maximise their profits” and shift their power bids to higher price bands, according to the regulator.
But Mr Bowen argued that renewables were keeping energy prices down.
“The data shows that renewables provide cheaper energy and when we are forced to rely on coal-fired generation and older, unreliable assets, prices go up. The faster we can get more reliable renewables into the system, the better it will be for energy bills and energy reliability.”