Power price relief for householders could be in sight over the longer term, after the energy regulator reported a drop of up to 64% for average annual wholesale electricity prices in 2023.
In its latest quarterly report, the Australian Energy Regulator (AER) revealed that average annual wholesale electricity prices dropped by between 44% and 64% across the National Electricity Market (NEM) in 2023 when compared to prices seen in 2022. The NEM services electricity to households and businesses across New South Wales, Victoria, Queensland, South Australia, the Australian Capital Territory and Tasmania.
The AER stated that this drop meant average annual wholesale electricity prices were significantly below the record highs experienced in 2022 – when the market faced pricing instability, forcing some retailers to leave and others to resort to telling their customers to find better deals elsewhere.
Does a drop in wholesale electricity prices mean lower power bills are on the horizon?
The wholesale electricity price refers to the cost in which generators and providers pay for their supply to customers, but its costs can play a role in determining the overall price for consumers.
While a drop in wholesale electricity prices is a good sign for the market overall, it doesn’t necessarily mean an immediate change for consumer power bills.
As noted in the AER’s report, as retailer’s wholesale costs adjust to the lower prices available, prices paid by consumers may begin to reflect these changes.
Grattan Institute’s Deputy Program Director for Energy and Climate Change Alison Reeve said these changes are unlikely to occur in the short term though, as most retailers have likely already locked in their costs.
“The fall in wholesale electricity prices is unlikely to affect consumer bills in the near term,” she said.
“Expectations about future wholesale prices have some bearing on what energy retailers will offer to consumers signing new contracts. But some of the cost to energy retailers of buying energy for us to use today was locked in two or three years ago. Current wholesale prices don’t affect that.”
Learn more about how electricity prices are set for consumers in our guide to electricity prices and costs.
What can I do if I am concerned about my electricity costs?
Ms Reeve said there were other ways consumers could reduce their electricity costs in the interim.
She suggested calling your retailer if you are having trouble paying and seeing if you could switch to a cheaper plan or set up a payment plan to manage costs.
Other tips shared by Ms Reeve included checking if you are eligible for an energy concession in your state, looking into energy efficiency tips for your home and shopping around for a better energy deal.
Stay ahead of power bill shock. See if you could be paying less for electricity with one of these cheap deals
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
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