Cost of living pressures and rising energy debt levels indicate some Australians will struggle to absorb continuing price rises, a regulator has warned.
Releasing an annual electricity and gas markets report, the Australian Energy Regulator said affordability would likely be an “ongoing challenge for the foreseeable future”.
“We recognise that more must be done to drive systemic change for energy consumers who struggle to pay their energy bills,” chair Clare Savage said.
Debt levels and other indicators of financial difficulties are expected to escalate from late 2024 to early 2025, even more than anticipated.
“We are reviewing the payment difficulty protections that currently exist and considering how these protections could be strengthened,” she said.
Economist Nicki Hutley said no one should have to choose between cooling their home or putting food on the table in a predicted period of sweltering temperatures.
So-called “game changer” reforms were submitted to the nation’s energy ministers almost a year ago, setting out a suite of proposals to break the cycle of energy debt, with some changes endorsed in July.
“We know Aussie households and small businesses are doing it tough,” federal Energy Minister Chris Bowen said.
“Our government is providing energy bill relief now while working to deliver an overdue reliable, modern energy grid that won’t be exposed to international price spikes.”
The report found retail energy prices were typically higher in regional and remote areas than in urban areas, with estimated annual customer electricity bills in 2023/24 ranging from $1413 for a customer in urban Victoria to $3102 in rural NSW.
The average amount of debt per customer increased most in NSW (17 per cent), South Australia (10 per cent) and Queensland (six per cent).
In gas markets, the regulator predicted supply risks in the short to medium term with gas to remain a critical fuel for electricity reliability and large industries for some time.
Meanwhile consumers who can afford rooftop solar, batteries and electric vehicles have become an even more integral part of the energy system.
Residential solar in the national electricity market now exceeds 20 gigawatts – 2.9 gigawatts more than last year – equivalent to 25 per cent of generation capacity.
New wind, solar and storage installations are expected to triple in the next 12 months as people look for more ways to take power into their own hands.
But current consumer protections were designed for a one-way supply of electricity directly to a home or business and not a system where a customer consumes, trades and produces energy.
Ms Savage said a report is due by the end of the year on next steps for additional help for consumers in energy stress.
Source: AAP
