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Queensland Electricity Prices to skyrocket 42%

The average national electricity price is predicted to jump by 37% by 2013/2014, announced in the latest report by the Australia Energy Market Commission (AEMC).

Queensland electricity prices are expected to skyrocket by 42%, which will lift the Tariff 11 rate from $0.236 per kWh (inc GST) to $0.33 per kWh (inc GST).


This price increase is set to trigger extensive controversy, because Australia has one of highest electricity prices in the world, and this is prior to the Carbon Tax being imposed (as illustrated in the chart below). Germany also has a high price for electricity, however, the extensive implementation of renewable energy (including rooftop solar power) and energy efficiency programs over the last 10 years has led to a substantial drop in electricity consumption, and hence the over cost conusmers incur is not as high as Australia.


The AEMC’s findings clearly highlight that small scale solar power, both residential and commercial installations, are not the main contributor to electricity price hikes over the next few years (2.8% of the 37% increase), despite several media outlets incorrectly allocating blame.


The total average national cost of a kilowatt-hour of electricity a household consumes is predicted to be a little over 30 cents by 2013-14 (based on estimates by the AEMC). This takes into account the carbon price (small impact) and rising network infrastructure charges (very big). Out of this, the actual cost of generating the power you consume is only about 10 to 11 cents per kWh. What makes the lion’s share of the difference is delivering that electricity to your door from the power station via big transmission lines and the smaller poles and wires in your street. This makes up slightly over 13 cents of the cost. Then the retailer takes a cut of the pie for managing the administration involved with billing, advertising and marketing costs, as well as contracting in risky wholesale electricity markets etc. The remainder is made of small fractions of cents to fund government programs that support renewable energy and also improve our energy efficiency.


The AEMC states the projected 37% national average increase to be contributed by the following components;

  • Transmission: 6.0%
  • Distribution: 33.6%
  • Wholesale: 40.2%
  • Retail: 12.1%
  • Feed-in tariff: 2.8%
  • LRET (Large Scale Renewable Energy Target: 3.8%
  • SRES (Small Scale Renewable Energy Scheme):  -0.8%
  • Other state based schemes: 2.3%

The AEMC have also provided a breakdown of each state's outlook.

  • Queensland - residential electricity prices forecast to jump by 42%, with the main drivers being the wholesale electricity component and distribution.
  • New South Wales - increase of 42 per cent forecast, again primarily due to distribution and wholesale electricity price increases, with the latter being the result of a price on carbon and increases in gas-fired generation capacity.
  • A.C.T - 42 per cent jump in nominal terms.
  • Victoria - 33% increase in residential electricity prices predicted.
  • Tasmania - 25 per cent electricity price hike forecast, mostly due to the wholesale component resulting from increased gas-fired generation and a minor wind component.
  • South Australia - residential electricity prices are forecast to increase by 36 per cent in nominal terms; driven in part by volatile demand, South Australia being a relatively small market and a high dependence on gas-fired power generation.
  • Western Australia - electricity supply to residential customers is forecast to increase by 30 per cent with over 80% of the hike due to increases in distribution and wholesale factors.
  • Northern Territory - The AEMC predicts Northern Territory residential electricity prices will rise 16 per cent in nominal terms between the base year and 2013-2014.

The official government AEMC report can be read here...

Solar Power is still regarded as the best way for consumers to protect themselves against rising electricity prices, and regain some control. According to recent estimates; over 500,000 households in Australia are reaping the benefit of generating their own electricity

Queensland households and businesses can still benefit from the $0.44 to $0.52 per kWh Feed In Tariff, which is locked in until 2028 for those who enter into a Network Solar Connection Agreement with Energex.

There are rumors and fears that a elected Queensland Liberal state government may reduce this Feed-In Tariff, as has been the trend in many other states. If this does occur, this reduction is likely to only apply to people and businesses who enter the Energex Network Solar Connection Agreement after an announced date by the government. It is for this reason many consumers are investing in solar power sooner rather than later, to provide this extra assurance in respect to the return on their investment.



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