No longer able to put the blame on solar power, the electricity sector is being increasingly scrutinised over pricing issues.
On Thursday, it was revealed households in some parts of the country have been paying up to $300 more each year for electricity due to power generation companies manipulating the market.
According to The Advertiser, while not currently illegal, “gaming” the market allows generators to hold back electricity supply from their facilities to put upward pressure on the price of wholesale electricity on hot days; when the cost of power can be as much as $12,500 per megawatt hour.
The article states generators made $76 million in a few hours on one day in 2008 by manipulating the spot price.
South Australia is reportedly the worst state for market manipulation.
The news coincided with another report that stated a record number of South Australians had their electricity disconnected last financial year – up by 34%.
South Australia isn’t alone in experiencing massive spikes in the cost of wholesale electricity during hot weather. Only last Thursday, the wholesale price in Victoria shot up to $12,500 per megawatt hour; even with the dampening effect that renewable energy has contributed with regard to the Merit Order Effect.
In a follow up article on The Advertiser, South Australia’s Energy Minister Tom Koutsantonis said power generators gaming the market would be hit with a $1 million fine and $50,000 for every day after that if they continue the practice.
On Friday, the Australian Energy Market Commission released its final report of the Power of Choice Review; which recommends giving consumers more options in the way they use electricity and allowing households with solar panels to sell the electricity they generate to parties other than their retail electricity supplier.
On Sunday, Prime Minister Julia Gillard announced a plan she says will reduce household power price increases from 2014. Ms Gillard stated the plan would save households up to $250 per year on their power bills.
However, that plan – the details of which are still sketchy and assuming it is implemented – won’t bring relief until 2014; making the case for going solar now as strong as its ever been.
