The recent Announcement from AEMO (the ‘Regulator’) suggest that power prices will go up in the eastern states from between 20 to 25 cents per kWh in July 23 for the DEFAULT offer. This means that for anyone not on the default offer the price increase will be somewhat less but still SIGNIFICANT.

Why does this happen? AEMO cites the Ukraine war and consequent pressures on the gas price (LNG), which amazingly still is the price-setter in Australia. Price-setter means that gas, being used as the fuel of last resort, sets the overall price. And it’s very expensive right now.

If you ask us, the entire system is corrupt. It is true that gas is the last resort IF COAL AND ALL SOURCES OF RENEWABLE ENERGY FAIL TO DELIVER AT THE SAME TIME. This hardly ever happens in real life, so why should gas be allowed to set the price for any period? At a time when Origin and Co deliver record profits to shareholders, power prices go up again. Wrong, if you ask me.

What can we do?

Have your own solar power is still the answer that comes to mind first, coupled with smart use of your own power. Use it, when the sun is shining, because feed-in tariffs are minuscule now. Another thing that makes me wonder why!!

As more and more retailers offer only plans with embedded peak demand (kVA or kW based), avoid having too many power-hungry appliances running ta the same time to limit your peak energy use. For exampel, turn off your aircons when cooking.

As understandable as this peak demand charging is from the network’s perspective (the aim is to reduce the total load on the network in times of possible network constraints = avoid blackouts), the approach taken is highly unfair for those who simply have no choice, and smacks of just another revenue raising measure.

If you can’t change your way of using energy in peak hours (4pm to 9am) try to find a retailer that still offer plans on a flat rate only without charging for demand. According to CHOICE, you’ll be better off in almost every way.

Where are power prices heading? The answer may be two-fold:

The increasing output of small and large scale solar is putting enormous pressure on wholesale prices, soc much that generators at times face negative prices. Bad for coal and gas, easier for solar as the input costs are NIL.
This should filter down to lower retail prices within the next 1-2 years.

It may not been long-lived though, as in order to accommodate more wind and solar, the existing infrastructure needs to be revamped massively. That comes at a cost, and guess who’s going to pay for it?

In any case, investing in solar is still very attractive, especially for those with money in the bank. Where else do you get a safe return of around 15-20% without any risk at all?

TESLA’s Powerwall 2 was released in 2017 and was set to revolutionize Li-Ion battery pricing. With twice the capacity of its predecessor, and at a cost of approx. A$8,000 in 2017, it briefly dropped the price to under $600 per kWh! The cost included all electronics, such as inverters and monitoring software.

Since then, the AU dollar has lost value and demand for batteries is outstripping demand – the price for a Powerwall 2 is now approx. $13,000. Other suppliers have followed suit. Expect to pay a minimum of $650 per kWh useable today in December 2019. However, the costs for large scale batteries are coming down, driven by demand response installations currently being built or in the planning stages. It is expected to filter through to smaller users as production and competition increases.

Expert such as Finn Peacock form ‘Solarquotes’ recommend NOT installing batteries right now UNLESS you have a good reason to do so: frequent blackouts, medicinal reasons etc.
We cannot agree more. It is just a matter of time until prices for domestic batteries will drop.

For business, peak-demand management with solar power and highly efficient batteries is already cost effective. With electricity pricing already going up and foretasted to go significantly higher, battery storage looks increasingly interesting.

There has been some media focus on projections for  lower power prices in future years being put forward by AEMO. The reason cited was that more cheap renewable energies coming online and exert pressure on distributors and retailers.

Well, We think this is wishful thinking. Any transition to a new energy system based largely in Renewables will require massive investments upfront, such as new transmissions links, stronger substations and distribution networks where the generation happens, and more interconnections between States. Guess who is going to pay for that?

In the distant future, there is a good chance that a largely renewable energy based energy supply system will provide much cheaper energy for all of us, but that may be 10-20 years in the future. Mind you, this transition is inevitable for our survival as a civilization, but there will be upfront cost and long term benefits.

Energy Efficiency is the key to unlocking the potential for making big energy savings. PV Solar is sexy, yes, but lighting retrofits, aircon retrofits, window and ceiling insulation etc. can pay back much faster than solar power.

Within Powersmart, we have seen many times how the 4 pillars of energy efficiency can reduce power bills by up to 80%:
LED lighting, aircon optimisation, reducing heat ingress and solar power.

Of utmost importance is the choice of technology and the quality of products within each technology. Ask us! We know which products have stood the test of time, which technologies are more than hype, which suppliers are reputable.