{"id":11058,"date":"2017-05-22T15:12:48","date_gmt":"2017-05-22T04:42:48","guid":{"rendered":"https:\/\/www.solarquotes.com.au\/blog\/?p=11058"},"modified":"2017-05-22T20:04:52","modified_gmt":"2017-05-22T09:34:52","slug":"reasons-for-high-electricity-prices","status":"publish","type":"post","link":"https:\/\/www.solarquotes.com.au\/blog\/reasons-for-high-electricity-prices\/","title":{"rendered":"Electricity Bills Are Rising Because Of A Lack of Competition And Coalition Opposition To Renewables"},"content":{"rendered":"
\"ronald

Ronald unveils the true culprit behind current electricity price rises.<\/p><\/div>\n

Australia’s grid electricity prices are about to soar so high<\/a> they’ll probably suffer from altitude sickness.\u00a0 Households in all states, with the possible exception of Tasmania, are looking at increases in electricity bills of roughly 20% over the next two to three years.<\/p>\n

It looks likely that Australia, a country with some of the lowest cost energy resources in the world, could end up with the highest pre-tax residential electricity prices anywhere.<\/p>\n

Those of you who have been told by the Coalition that coal is cheap may be wondering how we got into this situation when coal generates 77%<\/a> of our grid electricity.<\/p>\n

A simple explanation of why wholesale prices have soared is because generators have been able to get away with charging more, but I suspect that answer is a little too simple for most reader’s tastes.\u00a0 It is completely true, but as an explanation it’s almost completely useless.<\/p>\n

In Western Australia prices are going up because the state government is removing subsidies that hide the true cost of electricity from households.\u00a0 But in the National Electricity Market, or NEM<\/a>, which consists of all the eastern states plus South Australia, bills will go through the roof because the wholesale price of electricity, which is what generators are paid to produce it, has more than doubled.\u00a0 This is shown on the following graph, which I have used a couple of times already:<\/p>\n

\"Average<\/p>\n

Increased natural gas prices are one factor I have already covered<\/a>, but by themselves they are not nearly enough to explain the 20% or so increase in electricity bills households will be hit with over the next two or three years.<\/p>\n

The two other main reasons why wholesale electricity prices have climbed so high are:<\/p>\n