Household electricity prices are expected to fall $77 a year in 2024 thanks to renewables, according to an industry report

Household electricity prices are expected to fall $77 a year in 2024 thanks to renewables, according to an industry report
iStock / Daniel Balakov
  • Australian households are projected to save $77 a year on power bills by 2024, according to a new Australian Energy Market Commission report.
  • The organisation states renewable uptake will drive prices down, despite the cost of improving the power network and the loss of a major coal power plant.
  • The findings come as senior government figures continue to advocate for the use of carbon-intensive power sources.
  • Visit Business Insider Australia’s homepage for more stories.

Household energy bills will drop by an average of $77 per year in 2024, according to an official advisory body to the Australian Government, with a wave of renewable power developments projected to make up for lost coal power capacity.

In a new report, the Australian Energy Market Commission (AEMC), which considers changes to national energy policy and provides advice to state and federal governments, states the average household electricity bill is likely to dip over the 2021-22 financial year.

Australians can then expect their power bill to rise by about $20 in the 2022-23 financial year, the report claims. That corresponds with the closure of New South Wales’ coal-fired Liddell power plant, which will cut down on the total power supplied to the grid.

But bigger reductions are lined up from 2023-24, led by the emergence of new rooftop and commercial solar power generation, wind farms, battery storage technologies, and ‘on-call’ gas power, AEMC said.

The organisation states some 2,500MW of electricity generation is expected to go offline when the Liddell plant is retired, but a combined 9,630MW will emerge from large-scale generation and rooftop photovoltaic solar in the coming years.

AEMC now has enough evidence to be “confident” that retail power prices will trend downwards over the next three years, despite the Liddell power plant closure, said AEMC chair Anna Collyer.

Those reductions are slated to outweigh the significant cost of upgrading Australia’s transmission and distribution networks to cope with new power sources coming online.

South-east Queensland residents are likely to experience the biggest benefit to their hip pocket, with AEMC projecting annual power bills will drop by 10%, or $126, from 2021 levels in 2024.

Tasmanian power bills will fall by 5%, or $125. Bills in Victoria are projected to decrease by 8%, or $99, followed by New South Wales, with a drop of 4%, or $50.

South Australia — whose energy grid demand dropped below zero over the weekend, largely due to renewable power generation — will see average power bills decline 2%, or $35.

AEMC projects the only increase will come in the Australian Capital Territory, where prices are likely to rise 4%, or $77 a year.

This increase will largely be due to environmental tariff scheme costs, and the impact of the Liddell plant’s retirement before the launch of new generation systems in 2023.

The expectation of cost-saving benefits from renewable energy contrasts with the opinion of senior Coalition figures, who continue to argue against the end of carbon-intensive electricity generation.

During a heated panel discussion in the lead-up to the COP26 climate conference last month, Deputy Prime Minister Barnaby Joyce argued against the notion of renewable energy driving prices down.

It was a “BS argument”, he said, claiming “wind power is unable to fill the void” left by the closure of fossil fuel power stations.

Despite those assertions, Australia’s use of renewable energy continues to surge. More than a third of Australia’s electricity was provided by renewable sources in September, according to the Australian Energy Market Operator.