The rude shock in your next power bill | ABC News Daily Podcast

hi I'm Sam Hawley coming to you from gadigal Land This is ABC News Daily [Music] after a huge rise in our power bills last year millions of households are about to see another big hike from this weekend that's despite the government extending its price cap on gas and a big push towards Renewables today the ABC's energy reporter Dan Mercer on what's happening in the market and

how we can protect ourselves from spiraling costs [Music] thank you Dan I think a lot of us on the East Coast have received these letters from our electricity providers in recent weeks with the rather Grim news that our power bills are going to go up once again that's right Sam yeah unfortunately from Saturday which is the beginning of the new Financial year Benchmark power prices will

rise for households and businesses across pretty much all of Australia's Eastern seaboard foreign default Market offers will affect customers in southeast Queensland in New South Wales and Victoria and South Australia and while technically the number of customers on those rates is relatively small somewhere in the order of 10 all up The Benchmark price is much more important than that it essentially sets the pace of all

the other price rises in the market so it affects everybody and that's about 10 million customers okay so it doesn't matter if you're on the default market rate or you've done a deal with your company you're still going to have a rise in your electricity bills that's right yeah absolutely you know as mentioned the default Market offer might only apply to a relatively small number of

consumers but it affects everybody there's you know another element to this as well and that's how these Rising prices are betraying you know a growing energy divide in Australia a lot of wealthier households have used and will use price hikes as the impetus to take matters into their own hands and install things like solar panels or batteries or heat pumps anything to sort of mitigate or

Shield their exposure but of course not everybody can afford or get access to these things you know just think of poorer households renters people living in apartments so for these cohorts the pain is likely to be even worse yeah there's no way for them to get out of these electricity bills so tell me Dan how much will the bills increase by what are we expecting yeah

well those Benchmark prices they're going to go up between about 21 in New South Wales 21.5 percent in southeast Queensland 24 in South Australia and about 25 in Victoria so a big whack and keep in mind that's just the default offer customers pay when they can't be bothered or they're not able to look around for a better deal more broadly we've seen reports of retailers hiking

offers by much much more in fact some people's power prices have reportedly Rising anywhere up to 80 percent or even a hundred percent in some cases oh my gosh and that could be because they've been on a really low tariff and the term of that deal is expiring but anyway you look at it it's you know a whole lot of price paying for consumers yeah it's

a lot and it's on top of the increases we already had last year exactly that's right and you know benchmark prices jumped about 20 I think in some cases last year and many customers besides were hit with whopping great tariff increases and so you know when you add those increases together it's a lot of money um together well thousands of dollars a year for some customers

I would imagine and it's also unprecedented I believe we've never had back-to-back power price increases like this in Australia and more to the point it's coming at the worst time for many households you know who are already struggling with rocketing interest rates grocery Bills going up and insurance premiums really kind of jumping as well so it's just another Financial blow yeah talk about the perfect storm

so Dan explained to me why we have to have such big hikes once again this year yeah I think it you know what we're seeing is the long tail of energy market up evil last year as you'd remember saying you know the Power and Gas markets went berserk really prices for gas and coal in particular were already high at the beginning of the year when Russia

invaded Ukraine in February uh 2022 now given that Russia is one of the world's biggest energy providers that war just sent those markets into the stratosphere the sanctions on Russia have led to another surge in the cost of oil and gas there's a more immediate problem skyrocketing gas prices they've been pushed up internationally by the war in Ukraine and on top of that in Australia coal

suppliers were crunched because of the floods we had last year demand search nor cold winter and renewable energy can sometimes experience droughts in those cooler cloudier months where you can get long periods where you know perversely can be quite still you know all of those things just collided and as a result wholesale prices for energy went to three four even five times their normal level now

all that might seem like history but you know it's critical to the price risers we're about to see because energy providers often contract on an annual basis so those prices they've been wearing over the past year will flow through to Consumers from July and what about the government cap that's been in place that's been in place for a while now I thought that was meant to

and households pay for Australian gas and that's what we're doing that measure capped gas prices at 12 a gigajoule and coal at 125 dollars a ton and you know by and large markets have fallen back to those sorts of levels but policies like these are always harder to implement than government's wager and we've seen reports of gas producers for example just withholding Supply over complaints that

the policy is poorly designed and it's creating these unintended the consequences it's a it's a Minefield for them to navigate and the federal government for its part reckons the Caps have saved the average household hundreds of dollars a year on bills but either way you know the policy was only ever supposed to be an interim thing yeah okay so it may have saved us some money

but certainly we're still going to have these hikes this year so it's it's a tough time for households so tell me Dan what can we actually do as a nation do you think to address this to make things a bit easier we probably should just start by saying that we're in a transition you know in a once in a century transition that should ultimately lead to

fairly stable prices if not low prices but stable prices because wind and solar resources are essentially free albeit you have to pay for the infrastructure to get those resources to Market and we've come a surprisingly long way in that transition already I mean last year about a third or more of the power gen traded and used in the National electricity market across the Eastern Seaboard with

renewable the energy Market operator known as aemo says we're Now setting records for the amount of renewable energy in the system and you know that's a hell of a feat considering you know the amount of clean power in the system just 20 years ago was practically nothing but in some ways we've done the easy bit of the transition Sam essentially we've added lots of wind and

solar power to a system that still runs on fossil fuels we're now rapidly reaching a Tipping Point where renewable energy is becoming such a big part of the market but it's breaking the business model of coal plants in particular and so the coal plants are shutting the Liddell coal-fired Power Station closed last month and AGL is looking to demolish the facility to make way for an

industrial energy Hub powered by wind and solar unfortunately you know there's a growing sense that the renewable energy needed to replace that coal is just not coming online fast enough nowhere near it and it's even more acute for the firming Technologies so things like batteries pumped hydro plants and gas generators that really are needed to back up the wind when it's not blowing in the sun

when it's not shining it seems like it's a sort of longer term fix how long is that going to take I suppose we're all in a position that this is benefiting us yeah that's the 64 million dollar question yes Daniel Westerman he's the head of the Australian energy Market operator which runs the system systems really across Australia and he certainly seems to be a little worried

renewable energy is the cheapest form of new build energy but this investment is not happening fast enough he told a big conference last week that this is the biggest transformation of the system since the introduction of electricity itself Lee reckons delays to the construction of things like transmission lines you know that's going to leave the grid vulnerable when the coal inevitably the eggs so we're calling

for Urgent investment in transmission our transmission network was laid out about 70 years ago and energy today from the Sun and the wind is in very different places and you know coal-fired power still accounts for about 60 percent of Australia's electricity needs and you know as much as two-thirds of that capacity could leave the grid by 2030. you know the cheapest way to create new capacity

is through renewable energy backed up by storage you know that's certainly a view that Daniel Westerman seems to hold but until the transition is complete I just don't think that people should expect their power bills to come down or this volatility to significantly ease because we're essentially going to be rebuilding the system as we go yeah okay so Dan so while we're waiting for the green

transition to be completed and we all want to see that quite soon I'm sure but what can consumers do in the meantime yeah well first and foremost Sam if people can shop around for a better deal then they really really should make that call yeah the default Market offer is exactly what it says on the tin it's what you fall back on if you don't find

something better somewhere else and consumer Advocates reckon you can save a thousand dollars a year or perhaps even more just by getting the best deal possible but beyond that you know all energy and electricity gas retailers are bound by law to offer their customers payment plans and assistant plans if they're in hardship so don't be afraid to ask for help if you need it you know

for those households who can afford it I dare say you know these price hikes may be the prompt they needed to get solar or other Energy Efficiency devices those who can't you know there's probably no point in sugarcoating it it's going to be hard you know how to bridge that growing energy divide is going to be an increasingly vexing problem foreign Mercer is the ABC's energy

reporter based in Western Australia the same price increases won't affect residents in wa the ACT Tasmania and the Northern Territory because those States and territories have different bodies setting prices so it was produced by Veronica app app David Cody Flint Sam Dunn who also did the mix our supervising producer is Stephen Smiley I'm Sam Hawley ABC news daily we'll be back again tomorrow thanks for listening

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