Newly released data in the Australian Energy Regulator’s (AER) Wholesale Markets Quarterly Q3 2020 report shows wholesale electricity and gas prices remained low during the third quarter of 2020, dropping to levels not seen since 2014 and 2016 respectively.
Average wholesale electricity prices ranged from $34 per MWh in Queensland to $54 per MWh in Victoria, marking the first time since 2014 that third quarter prices were below $55 per MWh in all regions.
Importantly for consumers, wholesale price falls are flowing through to retail electricity price reductions. The most recent Australian Bureau of Statistics (ABS) Consumer Price Index (CPI) update showed year-on-year retail electricity prices have fallen for 7 straight quarters, with prices dropping by 0.7% for the quarter nationally and 2.5% through the year.
Wholesale gas prices have remained at 2016 levels of $4 to $5.50 per GJ. In Victoria, wholesale gas prices decreased for the seventh consecutive quarter to $4.56 per GJ.
The AER noted a contributing factor to these gas price trends is the Australian Government’s Day Ahead Auction (DAA) scheme which aims to facilitate gas transfers across the markets. The Q3 2020 report found a record number of trades occurred through the scheme during the third quarter.
The Hon Angus Taylor MP, Minister for Energy and Emissions Reduction, said lower energy costs were good news for Australians, especially those families and businesses experiencing financial hardship due to the COVID-19 pandemic.
‘COVID-19 continues to impact households and businesses, so any reduction in energy prices across eastern Australia is welcome relief for many Australians,’ the Minister said.
The best way for consumers to benefit from lower wholesale electricity and gas prices is to shop around for the best deal possible. The government’s energymadeeasy.gov.au website makes shopping around easier than ever.
For more information, see the Minister’s media release.