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This guide will turn you into an electricity expert, so you can compare plans in Queensland with confidence. You will find out how energy is made and distributed, how this affects the price you pay and all the other factors that determine your bill. And of course, most importantly, we’ll show you how to find a cheaper bill for your home or business.
How does electricity reach my home?
How is the Queensland electricity price determined?
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The electricity you use to power your home passes through three industries before it reaches you – electricity generators, distributors and retailers. The costs incurred by each of these industries play a part in the total amount on your electricity bill, so it pays to understand the process. Each of these industries, and the factors that affect their costs, are explained below.
Electricity generation in Queensland is a mix of privately owned and government-funded companies. Traditionally, the state’s power has been mainly coal-fired, with plants near Brisbane and Rockhampton/Gladstone, plus gas plants in more remote locations and biomass plants on the coast. Today, fossil fuels still make up around 80% of Queensland’s power generation, making them more reliant on coal and gas than some other states.
Just over 20% of Queensland power is generated through renewable sources, including 18 solar farms, 2 wind farms, and 2 hydro stations.
The Queensland Government is committed to renewable energy growth, with a $500 million renewable energy fund announced in 2020. This fund aims to create publicly owned wind and solar power plants, alongside the biomass plants which are currently the largest renewable generator in Queensland.
Queensland is mostly powered through the National Electricity Market (NEM). The Australian Energy Market Operator (AEMO) manages the supply of electricity from the generators into the NEM grid, controlling how much each generator can feed into the grid and when. In some areas of rural and regional Queensland, electricity is fed into small, isolated networks that are not part of the NEM.
To transport electricity from the generators to your home or business, it needs to pass through a complex network of transmission and distribution lines.
The transmission network in Queensland is called Powerlink Queensland, a government-owned corporation that oversees around 15,000 km of high voltage transmission lines that take electricity from the generator across the state.
The high voltage electricity is then passed to a lower voltage distribution network, ready to power your home. Three distributors in Queensland are responsible for the safe and consistent delivery of power for residential and commercial use. Their responsibilities include maintaining the poles and wires, trimming trees, emergency works, customer connections and meter readings.
The three distribution networks each have different costs for supplying electricity to different areas. You cannot choose your distribution network, it is solely determined by where you live:
Energex – South East Queensland.
Ergon Energy – regional Queensland.
Essential Energy – areas close to the Queensland – New South Wales border (this is a NSW distributor).
To access the electricity from the distribution network, you need to connect to one of Queensland’s 36 privately owned electricity retailers, or for regional customers, the government-owned Ergon Energy.
It is the role of the retailers to manage customers’ accounts and make sure you enjoy a consistent electricity connection for your home or business. The retailer is responsible for covering the costs of the generators and distributors, as well as their own costs, through their customers’ bills.
With so many retailers in the Queensland market, you can find some great deals and special offers as companies try to stand out from the crowd and win your business.
You can read more about Queensland’s energy retailers here.
Now that you know how electricity gets to your home, you have a good idea of the variables that make up the price of your bill. But we’re not finished yet!
Several other factors affect the final cost of your power bill, including the wholesale cost of electricity, if you live in South-East Queensland or a rural area and the time of day you use your electricity. The price of the Default Market Offer (DMO) also has a big part to play in the final cost of electricity. Each of these factors is explained in more detail below.
The costs incurred by the generator to produce electricity, along with the demand from the NEM, affect the price of wholesale electricity. If the price rises, this is passed on to customers to make sure the industry stays profitable.
Wholesale electricity prices in Queensland can be affected by several factors:
Volatility in coal prices – 80% of Queensland’s power is still generated using fossil fuels, with coal-powered power stations making up the majority of the state’s electricity production. This reliance on coal makes Queensland particularly susceptible to price hikes when the cost of coal goes up.
Many factors contribute to the volatility of coal prices. In recent years there have been global distribution issues due to COVID-19 and local distribution issues due to flooding and bushfires. Sanctions on Russian coal following the invasion of Ukraine have also caused the global cost of coal to rise.
Supply issues – when supply cannot meet demand, the cost of wholesale electricity rises. Supply can suffer for a range of reasons. The most significant supply issue in Queensland was the explosion in the Callide C Unit 4 at the Callide Power Station in Mount Murchison. This caused Queensland’s worst blackouts in decades, with long-term supply issues still being felt as the extensive damage is predicted to keep the generator out of action until mid-way through 2023.
Transition to renewables – although the Queensland Government’s $500 million renewable energy funds will lead to cheaper electricity in the long-term, there are impacts and hurdles in the short term that have caused a jump in electricity prices.
Most notably, there are significant changes required to the NEM to accommodate the new, widely spread renewable energy generators. The NEM was designed to receive power from a few large scale generators, located around two hubs of Brisbane and Rockhampton. The introduction of renewables means the network now needs to receive power from many geographically dispersed smaller generators. Until the infrastructure has caught up, short-term network congestion is pushing up the cost of wholesale electricity.
Increased demand for power – the heatwaves and warm temperatures experienced by Queensland in the summer, along with the re-opening of workplaces after the lockdowns, have seen a sharp increase in the demand for power, adding to the supply issues.
A significant portion of the electricity price comes from the cost of transporting power to your area. As a result, regional customers pay a higher price than customers in Brisbane and surrounding areas.
There are three distribution networks in Queensland. Energex and Ergon are both owned by the Queensland government, while Essential Energy is owned by the New South Wales government.
The cost of supplying electricity to regional areas is more expensive, due to larger distances needing more infrastructure and maintenance. Although the Queensland government subsidises customers in the Ergon network area, it is still more expensive than the cost for those in South-East Queensland.
During times of peak consumption, Queenslanders pay more for their electricity usage. Peak periods in Queensland are usually between 4 pm and 8 pm when heavy usage appliances like air-conditioners and pool pumps are switched on.
In addition, there are also seasonal peaks, when extreme heat or cold leads to an increased demand for power.
In recent years peak demand has grown due to population growth and an increase in technological use. As a result, electricity distribution companies have had to build more infrastructure like poles and wires, which is passed on in the price consumers pay for electricity.
To offset the expense of peak periods, many retailers offer lower rates for the electricity you use in off-peak times. There are three types of tariffs to choose from relating to the time you use your energy – make sure you are signed up for the one that saves you the most!
Single rate. A single rate tariff charges you the same rate for electricity, regardless of the time of day.
Time of Use. A time of use (ToU) tariff uses a smart meter to track how much electricity you use in off-peak periods and charges you a lower rate for that usage.
Controlled load. A controlled loadtariff is similar to ToU, but charges a lower rate for certain, separately metered appliances such as hot water systems or swimming pool pumps. These appliances are then charged a lower, off-peak rate.
The electricity market in South-East Queensland was deregulated in 2016, meaning private retailers could enter the market and set their own prices. As a result, electricity prices in South-East Queensland are very competitive for those consumers who are actively engaged in the market.
The DMO was introduced in 2018, following a report from the ACCC that found loyal customers were being exploited by retailers with non-discounted standing offers that were sometimes hundreds of dollars more expensive than their other plans.
In the same ACCC report, it was found that customers were being disadvantaged by plans that were too complicated and difficult to compare.
The DMO is an electricity reference price set by the Australian Energy Regulator (AER). It works in two ways to address the issues raised in the ACCC reports. Firstly, the DMO price is the maximum price cap that retailers can charge, protecting customers from unfairly high standing offers. Secondly, retailers are now required to show their market offer rates as a percentage discount from the DMO, making it simpler to compare all the plans on the market.
The DMO price is reviewed by the AER every year to make sure it reflects a fair price for providing electricity. An increase in the DMO will result in a higher electricity bill for you.
You can read all about the DMO here.
In regional Queensland, the regulated price is set by the Queensland Competition Authority (QCA). Most customers in regional Queensland pay a standard offer from Ergon Energy. This is because Ergon is subsidised by the Queensland Government, and other retailers cannot match the subsidised price. If the QCA raises the regulated price due to any of the reasons above, this will increase the amount that regional customers pay for their electricity bills.
In Queensland, according to data from the QCA, an average electricity bill is made up of 46% network charges, 26% wholesale costs, 18% retail costs, 7% other charges, such as renewable energy or carbon offsets and 3% metering.
For transparency, the retailer will break down the charges on your bill. Each charge relates to the costs and variables discussed above. You will see some of the following charges on your bill.
Consumption charge. The consumption charge on your bill will be shown as cents per kilowatt-hour (c/kWh). The amount is calculated by how much power you use, and the tariff applicable to your electricity plan.
Your tariff will be one of the following; a Flat Rate, where you pay the same electricity price regardless of the time of day, Time of Use, where higher prices apply to peak periods and lower charges for off-peak, or Interruptible Supply, also known as controlled load or economy tariffs, where electricity will be disconnected for several hours each day. Controlled loads can be metered separately to power specific appliances such as a swimming pool pump or hot water system.
You might also see a Demand Tariff, shown as dollars per kilowatt ($/kW) per month, which is based on the rate that electricity is used, and is higher during peak times, or a Combination Tariff which means you will be charged a combination of the tariffs described.
Supply Charge. The supply charge will be shown as cents per day. This is the amount that it costs the supply chain, including distributors and retailers to deliver electricity to your home, including maintenance of poles and wires and the retailer’s costs, such as account management.
Distributor Charge. This charge is added to your bill when the distributor is required to perform actions beyond the regular supply of energy. This charge might relate to additional services such as same-day connections or emergency works.
Now that you know the charges that apply to your Queensland electricity bill, you can start comparing offers with confidence. Although some of the charges are pre-determined by your distributor and the cost of generating electricity, retailers in South-East Queensland have a range of plans available with different rates, discounts and special offers.
Doing some research to find the cheapest plan can save you hundreds of dollars each year, but there’s a lot to consider! Each of the variables to consider is discussed below, and remember, the best plan is the one that suits your personal energy needs.
If you live in regional Queensland, the rate you pay will be subsidised by the Queensland Government through your Ergon Energy plan. This subsidised rate ensures you are paying the same low rate as customers in South-East Queensland, despite the increased distribution costs, however, there is no competition, as retailers cannot match this low rate.
In South-East Queensland, things are a bit more complicated! 36 electricity retailers are competing to give you the best deal on your bill. If you haven’t changed your provider or plan for several years, then you are probably on a standing offer plan and paying price set by the DMO. This is usually the most expensive rate, so you should look for a cheaper plan, by comparing the factors below:
Market offers have a range of rates and benefits to choose from, depending on your needs. Each market offer will be based on a different tariff or type of use. You can find plans offering low off-peak rates, high solar feed-in tariffs or special rates for things like swimming pools or electric vehicles.
Other benefits might include fixed-term discounts, giving you guaranteed rates and peace of mind, or no lock-in contracts or exit fees.
When you compare market offers, make sure you find one that will give you the best value throughout your contract – don’t be swayed by short term discounts that sound too good to be true!
Special offers and discounts
On top of lower rates, many retailers offer additional special offers or discounts to win your business. Some common offers include credits for signing up online, discounts for paying on time or reduced rates for choosing paperless bills or direct debit.
If your retailer offers other services such as gas or internet, you might also get a lower rate by bundling your services with them.
With the many types of tariffs and discounts available, it can be hard to find the best deal. Retailers are now required to show their market offers as a percentage of the DMO to make it easier to compare plans from different providers.
It’s important to read and understand the terms and conditions of your offer and discounts. Most offers are for a fixed period, usually 12 months, and after that, you will be transferred to a higher, non-discounted plan. Make sure you compare your bill every 12 months to make sure you continue to get the best deal.
Other incentives and rewards
In such a competitive market, many Queensland electricity retailers have added additional financial incentives to convince you to move your energy account to them. Several retailers have their own Rewards Shop, where you can earn points every time you pay your bill, and exchange them for rewards such as movies, theme parks, hotels, dining experiences and much more.
Other common rewards include sign-up bonuses of up to $100 or products from partner companies bundled into a plan. For example, Alinta Energy offers 12 months of free access to Kayo when you sign up for their Sports Pack, or you can earn Qantas points with both Alinta and Red Energy.
The Queensland Government offers rebates for eligible concession cardholders, including Queensland Seniors Card, Services Australia or Department of Veterans’ Affairs Pensioner Concession Card, Services Australia Health Care Card, Department of Veterans’ Affairs Gold Card and Asylum seekers with an ImmiCard.
The rebate (in 2022) is $340.85 per year for electricity and $76.19 per year for natural gas.
To find out more contact your energy provider or visit the Queensland Government energy rebate page.
Below is a summary of some of our preferred electricity retailers and plans for residents of South-East Queensland. You can read our full list of retailers here so you can compare and save.
As one of the ‘Big Three’ energy retailers and one of our preferred suppliers, we trust EnergyAustralia to provide great rates for your electricity.
Our favourite feature
There’s nothing worse than spending hours trying to get help from your energy supplier. You don’t need to worry with EnergyAustralia. Their innovative customer experience has been named No.1 Digital Customer Experience for 6 years running by Global Reviews.
Our favourite plan
Our favourite EnergyAustralia plan for Queensland is the No Frills and NBN 100 bundle. This electricity-only plan gives you a 9% discount on the DMO, plus by bundling with the NBN you get an additional $10 off per month. The plan can be made 100% carbon neutral at no extra cost and you get a $50 sign up credit when you join online.
EnergyAustralia has a wide range of options, including no lock-in contracts, fixed-rate plans and solar feed-in tariffs, along with their NBN plans. Currently, they do not offer gas plans for Queensland customers.
To switch your plan to EnergyAustralia call CheapBills on 1300 786 045 or enter your details here.
Simply Energy is the Australian arm of ENGIE, one of the largest power producers in the world. They provide electricity and gas to more than 700,000 customers, totalling 12% of the Australian market.
Our favourite feature
Parent company ENGIE is a world leader in the transition to a zero-carbon economy, with large investments in renewables, energy efficiency and sustainable energy solutions. Simply Energy is a great choice for Queenslanders who want their energy to be green.
Our favourite plan
At the moment, Simply Energy only offers electricity to residents in Queensland (gas is available in some other states). Our favourite choice of electricity plan is the Simply Blue Perks plan. This plan offers a huge 16% off the DMO, 100% carbon-neutral energy, no lock-in contract or exit fees, plus a complimentary 12 month NRMA Blue membership, which comes with discounts on fuel, travel, dining and more.
To switch to Simply Energy visit www.simplyenergy.com.au or call 1300 943 158 to discuss your plan.
If you want to browse more retailers available in South-East Queensland, see our full list here.
Customers in regional Queensland receive their power from the government-owned retailer, Ergon Energy. Most customers are on Tariff 11, a single rate tariff, although other tariffs for customers who use more electricity at certain times of the day, or in certain seasons, are also available.
The subsidised rates are comparable to approximately 18% off the DMO. This is a very competitive rate, which is why other retailers do not compete in the market.
To switch your electricity to Ergon Energy visit https://www.ergon.com.au/retail/residential or call 13 10 46.
If you are ready to switch your electricity provider, there are a couple of steps you need to complete first. It’s important to understand your energy usage rates so that you can look for the best type of tariff for your home or business. Our comparison service can help you understand how you use your energy and compare electricity plans and tariffs, to find the best deal and start saving.
As well as understanding your energy needs, you also need to understand your budget. Before you switch, take a look at your whole financial situation, including home loans, credit cards, life insurance and other financial products. Our team of experts can find you a plan to suit your budget.
With all the variables to consider, and hundreds of dollars on the line, when it’s time to switch it’s best to call in the experts! A comparison tool like CheapBills will not only help you find the best and cheapest plan to suit your needs, but we’ll also take care of the switch for you, with no interruption to your power supply, and no stress! All you have to do is sit back and enjoy the savings!
Call CheapBills on 1300 786 045 or enter your details here.