Yes, you heard that right! Electricity consumption in Australia will now be 9.6% to 20% more expensive. Australians will face a double-digit increase in their power bills from July 1, 2022.As Australia’s east coast is gripped by winter, there are likely to be many people paying more on their electricity bills. The reason? Rising demand and an increase in electricity prices.
Wholesale electricity prices have risen by a record 141 per cent in Australia over the past year according to the Australian Energy Market Operator(AEMO). The rise is primarily due to energy policy uncertainty and high gas prices.
The reason behind the increase in electricity prices:-
Due to the ongoing war between Russia and Ukraine, the situation in Russia is no good news for Australia. Due to its role as a major supplier of energy around the world, Russia is at the forefront of the effects of the war. Many international countries have stopped importing Russian oil and Gas including Australia. Coal and gas prices have been rising in recent years due to the competitive supply of oil and gas from other nations.
The price increase has had a significant impact on Australian households as 70% of their electricity is sourced from coal, which means that price hikes will have a big impact on their economy.
Increased transportation cost
Most of Australia’s fossil fuels are exported overseas, including coal and gas. The transportation costs are going up. Since coal, gas and oils have to be transported for electricity generation, these fossil fuels make electricity more expensive. This has led to an increase in domestic wholesale energy prices.
Unplanned outages at coal-based and gas-based plants
Some coal-fired and gas plants aren’t operating at full capacity due to unplanned outages, but Resources Minister Madeleine King said some outages result from maintenance on aging facilities.
Harsh weather conditions
The recent flooding events in New South Wales and Queensland have affected the supply of coal. Interruptions are having flow-on effects, further reducing production and impact on prices. The price of coal has risen due to these supply issues, but not to the same extent as gas prices due to an excess of supply.
Increasing coal and oil prices have led to an increase in the unit cost of electricity. This will automatically discourage residential consumers from using excess electricity. The entire winter will be a test since the cold waves are hitting the parts of Australia and staying without electric heaters is impossible.
Australia’s energy supply relies heavily on coal, which is seen as a reliable option due to its low cost and abundance. However, high gas prices have caused significant price hikes for Australian households with almost a third of them now using electricity to heat their homes and cooking (shocker), this increase in energy prices will have a big impact on the costs they pay.
With a rising population and limited supply, the world’s demand for oil, coal and natural gas is soaring. Oil and natural gas prices have reached record highs, with severe impact on Australian households and businesses. What should we do about this?
It all starts at home with changing our everyday habits. Our daily habits have a huge impact on the way we consume electricity. Also, we can reduce our reliance on traditional methods of electricity generation by switching to renewable methods for energy production. But will changing our electricity consumption habits and using renewable energy be a viable solution? Check out how our small energy-efficient initiatives could help address the high electricity price in Australia.
By switching to energy-efficient appliances by replacing high-energy ones, energy STAR appliances can save homeowners thousands of rupees over the appliance's lifetime by reducing energy consumption.
Replace your old incandescent bulb with LED lights
LED lights use up to 75% less energy and they last 25 times longer than incandescent bulbs and CFLs.
Go green by planting trees
Trees and shrubs are great ways to save the environment and reduce your carbon footprint. Trees provide shade around your home, reducing the amount of light entering. Enhancing comfort and reducing energy consumption
Reduce your energy consumption
You can work on your daily habits to reduce your energy consumption. Simple ways to reduce your energy consumption are switching off appliances like fans and light bulbs when not in use.
Install solar panels
Solar energy is the best solution for many reasons. It is cheaper than coal. Many homeowners are moving towards solar energy because they can get power at much lower prices with solar than they would with coal and gas. Solar energy is renewable—it comes from the sun, so we’ll always have this energy source available to us. Coal on the other hand comes from a limited resource that will eventually run out. Solar panels generate clean energy that doesn’t cost you anything once installed!
We don’t want you to worry about your electricity consumption today or next few decades. Request a quote from us today! We’ll take care of the documentation and permits and handle all the aspects of your solar and battery system installation. We also offer lifetime support for your solar system.