EAST coast residents are currently shivering through a cold snap. While you may want to reach for the heater dial, rising energy prices are predicted to worsen cost-of-living pressures.
The Australian Electricity Market Operator (AEMO) reported that in the first quarter of 2022 wholesale prices went up 141 percent from last year, and the ASX showed prices this quarter at $AU302.
With factors such as the Russia-Ukraine war threatening energy supplies, and supply chain difficulties, commentators have for months warned of an oncoming energy crisis.
But what do rising wholesale electricity costs mean for Australians’ power bills, and could it speed a shift to renewables?
Australia exports most of its fossil fuels, including coal and gas, overseas. Since coal and gas (as well as oil) prices are increasing worldwide, and transportation costs are going up, the cost of fossil fuels is rising. This has resulted in an increase in wholesale energy prices domestically.
But it is also part of the global trading market and is linked by supply agreements to export most of its fossil fuels. Revoking or significantly reducing exports cannot be done easily in the short term. Australia remains almost entirely dependent on imported energy, leaving the country vulnerable to future global price shocks and supply disruptions.
Would having more renewable energy sources decrease energy price shocks in Australia?
Any solution won’t see an immediate change to the rising cost of staying warm. People will need to rug up and look at all the ways they can reduce their overall energy costs until a solution is found.
