Energy prices could rise by 35% next year
One of Australia’s largest energy companies has predicted that retail electricity prices will rise by more than 35% next year. The projection is based on current forecasts and ongoing costs, and it would put additional strain on Queensland households that are already struggling to make ends meet.
Alinta Energy CEO Jeff Dimery told the Australian Financial Review’s energy and climate summit that an upfront discussion was required.
“When we run our modelling for energy pricing next year, using the current market prices, tariffs are going up a minimum 35 per cent,” Mr Dimery said.
“Now, maybe, the regulators are going to change the rules on that, I’m not sure.”
Russia’s invasion of Ukraine has raised global energy prices, but Mr Dimery also emphasised the cost of Australia’s transition away from fossil fuels.
Alinta intends to close its 1,000-megawatt Loy Yang B coal-fired power station in Victoria, replacing it with offshore wind and pumped hydro.
“What cost me $1 billion to acquire is going to cost me $8 billion to replace, so let’s talk about that and [someone] explain to me how energy prices still come down,” Mr Dimery told the summit.
“I don’t get it. I am missing something.”
Electricity prices in Australia have already risen dramatically in recent years. According to Joel Gibson of the consumer advocacy group One Big Switch, tariff increases ranging from 43% to 285% as energy retailers respond to a soaring wholesale market.
Mr Dimery expressed concern about the amount of work required to ensure reliable renewable power as the country transitions away from fossil fuels.
“If you look at all the development that has occurred up to this point — and what needs to happen between now and even 2030 — I get concerned,” Mr Dimery said.
“I get concerned about the $60 billion of development that is required in Queensland. I get concerned about the $20 billion AGL has flagged.”
The most reliable way for Australians to combat rising energy prices is to invest in rooftop solar panels, which can have a payback time of only 2.5 years and an ROI of 30% or more.