Electricity prices are forecast to fall over the next three years as lower costs of gas and renewable energy drive a $150 drop in energy bills for a typical Victorian household and a reduction of $30 in NSW.
However, the situation in NSW is more complicated. Prices are forecast to fall overall in the next three years. Next year a 5.4 per cent drop is forecast, the following year 4.1 per cent reduction and then a rise of 7.8 per cent the year after that.The modelling factors in a reduction to NSW electricity supply due to the planned closure in 2023 of the Liddell coal fired power station, but has not incorporated recent policy announcements from federal or state governments.
NSW is underwriting construction of a whopping 12 gigawatts of renewable energy by 2030 and the federal government has committed to ensure an additional 1000 megawatts of dispatchable energy enters the grid before 2023. The AEMC Price Trends 2020 report said the “biggest driver of price in the next few years will be cheaper gas prices and new and cheaper electricity generation like wind and solar”.