ACT households are set to enjoy an average 2.56 per cent drop in electricity prices from 1 July, after the national capital succeeded in reaching its 100 per cent renewable electricity target.
The new electricity price determination from the Independent Competition and Regulatory Commission (ICRC) for 2020-21 said that falling wholesale electricity costs driven by increased uptake of renewables, combined with the falling cost of the renewable energy certificates, contributed to the fall in electricity prices.
A 7.5 per cent fall in wholesale electricity prices, a 25 per cent fall in compliance costs for the federal Renewable Energy Target and a 16.4 fall in the compliance costs for the ACT’s own renewables and energy efficiency schemes were more than enough to account for a 13.8 per cent increase in network costs for the 2020-21 year.
The ACT already enjoyed some of the lowest electricity prices in Australia and has successfully maintained that advantage while also transitioning all of the ACT’s electricity supplies to renewable energy sources. The ACT officially achieved its target of 100 per cent renewables – sourced from a range of wind and solar farms in South Australia, NSW, Victoria and the ACT – in October last year.
ACT minister for climate change and sustainability Shane Rattenbury says that the fall in ACT electricity prices showed that the transition to 100 per cent renewables was the right thing to do, despite a range of scaremongering that suggested that it would drive up costs.
“This is a welcome decision, and if ActewAGL passes through the full price decrease – which I hope they do – it would see a decrease of about $43 on the annual electricity bill of the average ACT household for 2020-21. For businesses the decrease will range from $66 – $265,” ACT minister for climate change Shane Rattenbury said.
“The decrease is especially timely, as businesses and households face extra pressures due to the COVID-19 crisis. It is important that essential services like energy remain affordable, and that people have equitable access.”
“The decision further demonstrates that good environmental policies, and renewable energy, go hand in hand with energy price relief for households and businesses.”
Bucking a trend seen across most Australian states, the ACT has retained both independent regulation of electricity prices, as well as seeing electricity supplies provided by a government owned utility, ActewAGL, which dominates the ACT market with an 80%+ market share.
Tasmania, which has also retained public ownership of its primary electricity retailer, with price regulation and very high renewables penetration, is the only other jurisdiction with cheaper electricity prices than those in the ACT.
The ICRC acknowledged that the increased deployment across the National Electricity Market was a main driver in the falls in wholesale electricity prices. Additional falls in the price of renewable energy certificates were also a contributing factor for the price decrease.
The ACT government will move to further improve transparency around electricity billing, to help consumers to compare available plans from their electricity retailer, as well as compelling electricity retailers to tell their customers whether they have a plan available that would further cut their costs.
“The ICRC notes that the increase in renewables generation is responsible for a significant portion of the decrease in electricity prices,” Rattenbury added.
“I also welcome the ICRC’s recommendations about improving information for electricity customers, and the Government will investigate implementing them.”
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