Electricity prices on the way down?

A recently announced Australian Government decision has the potential to significantly ease electricity costs.

The Government has decided to introduce an electricity ‘default market offer’ with a price cap. This is a standard contract with a regulated price cap. This was one of the key recommendations of the Australian Competition and Consumer Commission’s (ACCC) report into the electricity market.

This decision is a watershed moment for people who can’t shop around online for a better power deal or who struggle to understand complicated energy contracts.

The Government has also directed the ACCC to monitor and report on prices and profits in the National Electricity Market.

Electricity providers will be legally required to provide the ACCC with information and the ACCC will monitor whether the electricity market is working in the interests of electricity customers.

Alongside these key decisions, a new analysis by Green Energy Markets says that prices will drop over the coming years regardless of this decision because of a growing renewable energy sector.

In a classic case of supply and demand, when large amounts of supply were withdrawn from the market following power station closures, prices began to rise. However, with large-scale renewable energy projects gathering steam, price reductions are predicted to follow.

Hope springs eternal.