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Why Power Prices Are Really Through The Roof

And How You Can Complain To Canberra

Why Power Prices Are Really Through The Roof

It's a long moaned about topic - power prices - why are they so high, and what can we do about it?

We might finally be getting some answers, after some in depth research from the Grattan Institute into what's wrong with out power system. Not that there's any guarantee of some quick relief.

Firstly, the we can all point our finger at the wholesale price. That's what your power company pays to the generator to buy the electricity. That price has increased up to 240% in the past two years.

So what has forced up the wholesale price?
1) the shut down of cheap coal fired power stations.
2) increase in the number of gas fired power stations being switched on, while the price of gas is also going up.
3) no big investments in renewable energy like solar or wind power, because governments keep changing their mind on climate change policies.

The news isn't all doom and gloom, if we're willing to wait a few years. Tony Wood, Energy Program Director from the Grattan Institute explains there is some good news ahead which can hopefully bring prices back down.

"The gas supply side is catching up" says Wood. "The Federal Government is certainly looking to try and improve, and I think we will see some improvement on that side which will flow through to electricity prices over the next year or so".

"Secondly, we need to get the ACCC on top of the high prices we're paying for the wires and poles, and why we're not getting the competition we should be getting between retailers." Tony Wood said.

Thirdly, we need a solid climate change policy, so "investors will know they can invest with confidence, and they'll get a sensible return on that investment, and we'll get better prices."

There you have it. There's no quick fix to bringing down power prices, but there is something we can all do. The Australian Competition and Consumer Commission will start public forums next week. Click here to find a forum near you.

 

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