Energy prices stabilise, begin to fall

The federal government has long promised that renewables will bring prices down, notwithstanding the recent period of global inflation – and today there is the first evidence that prices may doing just that.

Today’s release of the draft Default Market Offer (DMO) shows the retail energy bill benchmark stabilising and trending downwards, according to Climate Change and Energy Minister Chris Bowen.

The independent Australian Energy Regulator (AER) sets the DMO as a benchmark for residential and small business electricity bills in NSW, southeast QLD and SA, with the draft decision showing stabilising and falling wholesale prices.

The draft DMO shows price reductions in most jurisdictions – with up to nearly 10 percent reduction for some small businesses and up to more than seven percent reduction for some households.

The news came as Zen Energy announced the construction of a monster 111 Mw big battery at Templars, 60km north of Adelaide.

South Australia built the world’s first big battery, the Hornsdale Power Reserve, in what was then a gamble by the state government, quickly proving the use of battery storage to firm supplies from intermittent wind and solar power sources.

The rest is history, but it has taken until today for prices to fall.

The Victorian Default Offer (VDO), set by Victoria’s Essential Services Commission also out today, shows an average reduction of 6.4 percent for residential customers for the VDO, and 7 percent for small business customers.

Bowen said: “Today’s figures show a welcome downward trend for prices following the biggest global energy crisis since the 1970’s – but we know there’s more to do to get cheaper energy in the grid for Aussie families and businesses.”

Later on ABC Bowen said the falls were a combination of bringing renewables on, coal and gas caps, reduced international pressure and also a request to prioritise consumers.

He said: “Biggest reductions for small business. South Australia and some New South Wales small businesses getting the biggest reductions, which is welcome.

“We’ve got a long way to go though, you know, nobody’s suggesting that this is over, or the cost‑of‑living pressures don’t continue to exist, as they do around the world, but yes, this is an encouraging day.”

Bowen said the move to renewables was continuing with in the past year:

• Record investment in batteries and large-scale storage, with $4.9 billion in new financial commitments
• 27 large scale batteries under construction at the end of 2023
• Over 337,000 rooftop solar systems installed across the country
• And 5.9 GW of renewable generation added.

Picture: Zen Energy/Zen Energy’s big battery will be built at Templars, north of Adelaide.