The 2017 “State of The Energy Market” report has been released by the Australian Energy Regulator with surprising findings.
The study which looks into different areas of the energy market claimed that 2016 was one of the most challenging times since 1998 when the National Electricity Market was established.
The main areas looked at were the wholesale markets, specifically the gas and electricity industries.
The report contained conclusions on differing areas including the retail energy market, all the way to regulated energy markets.
What does the report say?
The report begins by breaking down the four different areas it researches and evaluates them, the areas including the National Electricity Market, eastern Australian gas markets, regulated energy networks and retail energy markets.
Breaking down each individual category the results are as follows:
The National Electricity Market research shows demand is rising particularly in Queensland and NSW, with high gas fuel costs contributing to high electricity prices. Improving climate policies and increasing certainty surrounding them at a government level can also help to increase investor confidence in the area.
In the area of eastern Australian gas markets subdued international oil prices and
restrictions are dampening investments in new gas projects. There are also concerns of a supply shortfall if current trends in the eastern Australian gas market continue.
Regulated energy networks and Retail energy markets
There are two further areas in which the report goes into detail. Regulated energy networks saw lower network charges that have helped cushion the effect of rising wholesale prices on customers energy bills.
Retail energy markets deliver some of the most surprising results with retail prices trending higher in 2016, except for in Victoria, with the sharpest rises being in NSW and South Australia.
It is also shocking to learn that Australian prices are higher than in the United States, Canada, and South Korea, but lower than in Japan, New Zealand, the United Kingdom and most of Europe. Despite the rise in wholesale prices however as the report talks about bringing down cost must not sacrifice reliability,
“South Australia’s statewide blackout in September 2016 drew attention to the importance of balancing price concerns with ensuring security of supply.”
