Victorian power bills will rise by about $99 per year as a result of the closure of Hazelwood by the 2018/19 financial year, a report released yesterday by the Australian Energy Market Commission revealed.
The 2016 Residential Electricity Price Trends report found the closure of Hazelwood in March next year will cause a reduction in supply, requiring Victoria “to import more frequently from the northern states”.
“This is expected to place upward pressure on wholesale electricity prices,” the report said.
Consumers would be hit by the biggest increase in the 2017/18 financial year before investment in wind turbines, driven by the renewable energy target, and flat demand would lead to a slight drop in 2018/19, according to the report.
“This is expected to lead Victoria to import less frequently from the northern states… and therefore placing downward pressure on wholesale electricity prices,” the report found.
“For a representative Victorian customer, power bills will be about $99 higher in 2018/19 than they would have been if Hazelwood was still operating (a rise of 9.2 per cent).”
The projected rise slightly exceeds the State Government’s own modelling, which predicted an increase of between four and eight per cent next financial year with an increase of $86.
State Member for Morwell Russell Northe said the reports findings were not a surprise and an increase in the wake of Hazelwood’s closure had been anticipated “by the vast majority of experts in the industry”.
But State Energy Minister Lily D’Ambrosio said the AEMC report’s conclusions were in line with the government’s own predictions.
“We’ve consistently said that Engie’s decision to close Hazelwood would lead to price increases of approximately four to eight per cent and AEMC has confirmed this to be true,” Ms D’Ambrosio said.
“Prices will actually fall in 2018/19 because of more renewable energy coming online, which is largely being driven by the VRET (Victorian Renewable Energy Target).
“The Liberals launched a shameful scare campaign claiming bills would rise by 25 per cent; they should apologise for the unnecessary stress this created.”