"Persistent worries about how effective competition is in the residential end of the retail market deserve scrutiny, and the ACCC is well placed to deliver that. It is no surprise, however, that retail prices are rising when wholesale electricity futures prices have doubled across Eastern Australia over the past year. It is wholesale market pressures that are overwhelmingly driving the current price rises.
"The ACCC review should include the factors behind wholesale price rises rather than only examining the additional factors that apply at the retail level. The elements at play in wholesale prices include the soaring price of gas, an important fuel for electricity generation which is itself in tight supply; the closure of many older power stations; an uptick in electricity demand; an electricity market design that fails to reward all the sources of flexibility and cost control that technology is making available; and an investment drought in the face of overpowering uncertainty about energy and climate policy.
"The Finkel Review of energy security currently underway is a golden opportunity for all sides of politics and all levels of government to cohere around reforms to deliver an energy system that delivers reliable and affordable electricity all the way through the global transition towards net zero emissions. Continued impasse and uncoordinated, unstable interventions will see price and security worries intensify – with jobs and investment lost and households under increasing pressure.
"We need to build the most transparent and competitive retail markets we can. But without action to fix our policy dysfunction, retail prices will continue to soar. Without action our electricity market will look very different in 12 months from now," Mr Willox said.
Media Enquiries: Tony Melville – 0419 190 347