Australia’s wholesale electricity prices are forecast to almost halve in the next four years – not because lower energy costs are on top of the new Morrison government’s agenda, and not because of the promise of coal, but thanks to the growing supply from cheap, renewable energy in the national mix.
Data from the latest Renewable Energy Index compiled by Green Energy Markets, and published on Thursday, reveals a direct link between investment in large-scale renewable projects, Australia’s rooftop solar boom, and falling energy prices.
The report shows energy prices started rising across the National Electricity Market in mid-2016, in the wake of the renewable energy drought that took hold in the Abbott years of the Coalition government.
Even rooftop solar PV installations – currently enjoying record breaking growth – were actually in decline in the period preceding the spike in power prices.
This, says Green Energy Markets, led to an insufficient amount of new renewable supply coming online ahead of the closure of the Hazelwood coal-fired power plant in Victoria, which also saw power prices spike upwards.
But by mid-2017, as a massive pipeline of renewable energy supply was starting to build, at costs vastly lower than previously thought, wholesale power prices have been steadily falling.
According to the GEM report, a massive 7,200MW of new solar and wind has been committed to construction since October 2016.
Added to that growth came a new boom in rooftop solar uptake, as Australian households and businesses took their soaring power costs into their own hands.
As the economic analysis prepared for the Energy Security Board found, it is this extra supply from all that new renewable capacity that will result in wholesale power prices almost halving between 2018 and 2022.
But of course, it is unlikely that narrative will be shared by the federal Coalition, who just lost yet another leader over the unholy trinity of energy, climate and renewables.
Indeed, just hours before the NEG had received its late rites, and before Turnbull was turfed, former energy minister Josh Frydenberg sought to credit the policy for falling future electricity prices. As GEM’s Tristan Edis writes here, that was a great big lie.
GetUp Campaigns Director Miriam Lyons says the data should be a wake-up call to Prime Minister Morrison and new energy minister Angus Taylor, that if they want to continue to bring energy prices down, scrapping climate or renewables policies would be a unwise – not to mention a disaster for the planet.
“What this data shows is that if Scott Morrison is serious about bringing down power prices he should be walking around Parliament with a solar panel not a lump of coal.”
“The evidence is clear, slashing renewables drives power prices up, when there is investment in renewables, prices start to fall.”
“In July alone rooftop solar installation created enough electricity to save Australian consumers $241 million in bill savings and power 39,565 homes, all forms of renewable energy generated enough energy to power 11.1 million homes.”
“To prove he genuinely cares about household power bills, Energy Minister Angus Taylor should immediately rule out scrapping the SRES scheme, which helps households take back control of their bills from the big power companies and encourages rooftop solar.”
