ABC News Daily How power companies justify another price hike
Mar 23, 2025
Alison Reeve, Energy and Climate Change Deputy Program Director at the Grattan Institute, dives into the persistent rise of electricity costs in Australia. She explains how government policies and global events, like the Ukraine war, are driving these hikes beyond inflation rates. Listeners will learn about the regional disparities in pricing and the limited relief measures available. Reeve critiques the effectiveness of government subsidies and champions alternative strategies for achieving energy efficiency, shedding light on a pressing issue affecting consumers.
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Electricity Price Hikes
- Australian electricity prices have seen substantial increases since 2022, ranging from 14% to a staggering 50% depending on location and usage.
- These increases are influenced by various factors, some beyond industry or government control.
Gas Prices and Electricity Costs
- Gas prices significantly impact electricity costs because the highest-priced generator at peak times sets the overall electricity price.
- High gas prices inflate electricity bills, even with minimal gas usage.
Gas Exports and Domestic Prices
- Australia's high gas prices are partially due to the country's significant gas exports, leading to domestic prices aligning with international rates.
- Sellers prioritize higher-paying international markets, impacting domestic gas and electricity costs.