The combination of conditions drove down wholesale electricity prices by almost 50 per cent in the quarter compared to the same three months of 2019, reaching their lowest level since 2014, Ms Zibelman said/
Excluding Tasmania, NEM prices dropped by 45-48 per cent to $32-$51 per megawatt-hour, depending on the state. AEMO found that the improved reliability of coal-fired power stations in NSW and Victoria contributed to the lower prices, as well as a reduction in prices bid in by black coal power generators and new solar and wind generation.
Low prices together with reduced daytime demand are likely to be ramping up financial pressure on less flexible baseload coal power stations, according to analysts.
Wholesale gas prices were also down, by almost 50 per cent compared with the September quarter of 2019, reaching their lowest level for the third quarter for five years. The benchmark gas supply hub price fell to $3.85 a gigajoule, although contract prices for guaranteed supply remain much higher.
Federal Energy Minister Angus Taylor said that falling energy prices must be passed on to consumers, something that the federal government’s “big stick” legislation would ensure occurs.
“Since the Big Stick legislation was first introduced into Parliament, there have been 13 straight months of wholesale price reductions on the previous year. We expect the energy companies to pass this on,” the minister said.
Mr Taylor also pointed to the findings earlier this week from the Australian Competition and Consumer Commission that consumers can get better deals from smaller retailers than from the larger suppliers.
“It’s therefore vital that consumers shop around to find the best deal available to them,” he said.