Wholesale energy prices hit new low, time to take advantage

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The energy companies are saving money, so now it’s time for you to do the same, according to Canstar Blue Editor-in-Chief Simon Downes.

That was his reaction to news from the Australian Energy Regulator (AER) this week (May 18) that wholesale electricity prices continue to fall.

The energy watchdog reported that, across the National Electricity Market (NEM), wholesale electricity prices hit their lowest Q1 level since 2015, with Queensland recording an eight-year record low.

“We’re seeing healthy competition in the energy market and these falling wholesale pricing are helping to fuel it,” said Mr Downes. “Everyone has been feeling the pinch of high wholesale costs over recent years, so this is finally some good news.

“But like petrol prices, it can take a while for the lower costs to be passed onto customers, which is why you need to be proactive and get yourself on a better deal now. You can’t rely on your current provider to pass on the savings, because in many cases they simply won’t. They’re saving money, so now it’s your turn.”

AER Chair Clare Savage said there are a number of factors behind the falling wholesale electricity prices, with gas costs also coming down.

“Weather conditions during the period were generally mild, notwithstanding some extreme events and high demand early in the quarter,” Ms Savage said.

“There were reduced costs for gas and coal generators which meant they could offer electricity into the wholesale market at lower prices. There was also an increase in the amount of low priced solar generation coming into the market.”

Ms Savage said that the increasing amounts of low priced renewable generation and lower offers from coal and gas generators are highlighting an emerging trend in the NEM.

“After an extended period where wholesale electricity prices rose and rose, we’re now seeing lower underlying wholesale electricity prices across the NEM,” she said.

In the gas sector, prices across all markets were reportedly at their lowest levels since Q1 2016.

How can you benefit?

Energy expert Simon Downes.
Canstar Blue Editor-in-Chief Simon Downes

The drop in wholesale electricity prices has resulted in an unprecedented price war in some states in recent months, most notably Queensland and New South Wales, Mr Downes explained. He encouraged anyone who hasn’t shopped around for a better energy deal in the last month to do so right now.

“We’re seeing the kind of price competition that the energy markets were deregulated for, and it’s great for households who take the time to compare their options,” he said. “Some retailers will just sit back and enjoy the savings they’re making through reduced wholesale costs, while others are taking the opportunity to lower their prices and become more competitive. These are the retailers you need to be paying attention to.

“The need to be proactive is still there, but the rewards for doing so are really significant. No one wants to switch energy providers every few months, but given the nature of the wholesale market, the reality is you can play the field and follow the savings as often as you like.”

Cheap Electricity Deals

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3900kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4600kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.

Image credit: Comaniciu Dan/shutterstock.com

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