WHOLESALE electricity prices have risen by 48 per cent this year in NSW, with a 58 per rise in South Australia and a 72 per cent increase in Queensland, according to figures posted by the Australian Energy Market Operator.
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Although the market operator said last week that closing Victoria’s Hazelwood power station would not affect market reliability, some experts say recent big increases in wholesale prices are proof the system is under pressure.
The Australian Financial Review on Friday quoted a new report from JP Morgan that forecast substantial increases in wholesale power prices as further power stations – including the Hunter Region’s Liddell in 2022 – were closed.
The market operator’s online “data dashboard” was showing wholesale prices of between $80 and $150 a megawatt hour on Sunday, despite modest NSW demand of about 7500 megawatts. Peak demand in NSW regularly exceeds 10,000 megawatts. Prices were even higher in other states.
So far this year, the average wholesale price in NSW is $76.41, a rise of 48 per cent on the $51.60 average for 2016. The Queensland price is $95.19, up from $59.99, while in South Australia it’s $105.88, up from $61.67.
Historical tables show that since 1999, wholesale prices in NSW had been relatively steady, at between $25 and $45 a megawatt hour, with only 2007, 2013 and 2014 exceeding $50 before last year.
Wholesale prices flow through to most retail customers and are proving critical for big industrial users of electricity. Andrew Liveris, the Australian-born head of US company Dow Chemical, said last week that the nation’s power problems meant there was “no reason to reinvest here and every reason to leave”.
