Mon-Fri 9AM to 8PM (AEST)The volatile Australian electricity market shows no signs of calming down in 2024. With the anticipated double-digit price increases for Australian customers, several smaller retailers have been forced to pass on the costs to customers and advise them to switch providers.
If you’ve noticed a recent increase cost of electricity in Australia or have received notice of a price hike from your supplier, you need to take action now to protect yourself from extremely high bills in the future.
Call CheapBills at 1300 786 045 today to beat the price rise and lock in a fixed-rate contract before prices go up on 1st July.
Key Points
- Background: What happened to electricity prices in Australia?
- What will happen to my electricity retailer?
- How can I avoid the increased rates?
What happened to electricity prices in Australia?
2024 has been a challenging year for the electricity industry. In the first quarter leading to March, wholesale prices increased, leaving retailers little choice but to pass on the increased electricity cost to consumers.
Wholesale prices are expected to continue to rise, and Australians are bracing for an additional hit to the cost of living. These price impacts are the result of varying overlapping factors.
Energy generators face rising operating costs, directly impacting power prices Australia.
The world is still reeling from COVID-19, which has debilitating impacts on global market conditions. While Australia continues to economically recover from the pandemic, population growth continues, and as a result, so does electricity demand. In response to growing demand, the price of electricity is rising.
The Russian-Ukraine invasion also triggered an energy price rise. The Australian government forecasted a more than 50% rise in electricity prices in response to Russian coal sanctions and requirements to find alternative power sources.
Australia also faces annual bushfires, floods, and severe outages, which have perpetuated these issues, leaving coal-fired power stations generating only around two-thirds of their full capacity.
This means that the Australian Energy Regulator (AER) is anticipating a significant increase in the price cap when it announces the 2023/2024 Default Market Offer (DMO) price. Following unusual market volatility, prices are set to rise by up to 20%-25% in July 2024.
What will happen to my electricity retailer?
The impact of the wholesale electricity price increase will be felt differently by different retailers. For larger energy retailers, the impact will be less because they tend to use hedging strategies to buy 12 to 24 months of electricity per customer at a set price. This means they won’t feel the immediate hit of the price hike in the energy market or need to pass it on in full to their customers.
In addition, the ‘Big Three’ Australian retailers, Origin, AGL, and EnergyAustralia, also control electricity generation and can remain profitable despite the increased price of wholesale electricity.
Unfortunately, it’s a very different picture for smaller retailers with limited hedging strategies. These retailers buy electricity mostly from the spot market, where they pay the current electricity price of the wholesale market. This means the impact of a price rise is immediate, leaving the retailer out of pocket in the short term and potentially unprofitable in the long term.
Electricity retailers are legally obligated to provide their customers with power under the terms of their contracts. In the face of soaring wholesale electricity prices, some retailers have no choice but to drastically raise their rates or encourage customers to switch to another retailer.
Retailers may be forced to take these extraordinary measures in the coming weeks. Customers are expected to receive notices warning them that energy prices are rising significantly and that they are encouraged to switch to another supplier to avoid these astronomical costs.
In Australia, the winter months typically increase the demand for electricity from the grid, so the problem will likely spread as wholesale prices continue to rise.
If you have received a notice from your retailer or if you are a customer of a small electricity retailer who is likely to be affected, you should take action now to protect your electricity bill.
How can I avoid the increased rates?
If you’re worried about the future of your energy retailer and your bill, don’t despair! We can help you find a cheaper, risk-free energy plan and enjoy improved peace of mind and more savings.
Following the anticipated AER’s announcement of DMO price increases, rates are set to go up. Make sure you act quickly to avoid being left with no choice but to pay the new, higher prices.
Electricity rates NSW and VIC are set to rise substantially. Get ahead of the ball, and prepare for Sydney electricity price rises—along with other high-population locations.
We recommended moving to a fixed-rate plan in the current unpredictable electricity market. The ongoing global and national issues affecting the cost of electricity are set to continue. Still, with a fixed-rate plan, the price you pay will not change for the duration of your contract, even if (and when) the cost of electricity skyrockets.
Contact CheapBills online or by calling 1300 786 045, and we can help you find a fixed-rate plan with great rates for your home or business.
But don’t forget – you need to lock in your rate before the prices go up, so contact us TODAY, before it’s too late!
Our team of experts will recommend a fixed-rate plan from our panel of providers that matches your unique energy needs. In addition to enjoying 12 months of worry-free electricity prices, we can find you additional benefits such as a high solar feed-in tariff, sign-up bonuses when you switch with us, and carbon-neutral or renewable plans.
You could also be eligible for an energy concession under your State government’s affordable energy scheme. Visit one of the links below to find out your entitlements:
- Victoria (Power Saving Bonus)
- New South Wales (Energy Rebates and Assistance)
- Queensland (Electricity Reticulated Natural Gas Rebate)
- South Australia (Energy Bill Concessions)
What next?
With a significant price increase on the cards for Australians in 2024, many smaller electricity retailers are on the brink of collapse. It is important that, as a customer, you take control! For both residential and small business customers, it could lead to a saving of hundreds of dollars and with the ever-increasing cost of living pressures, that could make all the difference.
If you are with a small retailer, you are at risk of your power bill doubling or your retailer collapsing. If you haven’t switched before July 1st, you may be forced onto a more expensive plan with a new retailer.
Our team is waiting to help. Call us on 1300 786 045, or enter your details online here to compare and save.
