Coal-fired power is being undercut by cheaper renewables, but a hot, dry summer may push power prices back up.
Cheaper renewables are helping lower power prices by squeezing more expensive black coal to its smallest-ever share of the energy mix over the past three months, but the growing likelihood of a hot, dry summer has experts on edge for future price rises.
This price spike eventually flowed through from coal and gas electricity generators to households in July this year when the market regulator, which sets retail electricity prices once a year, raised the cost of default retail contracts to reflect the higher input cost, pushing annual bills up by $352 in Victoria and $435 in NSW.
Climate Change and Energy Minister Chris Bowen said renewables were cutting power bills: wholesale prices were under $100 per megawatt hour in most regions across the grid during the past three months, which was less than half the price of the same time the previous year. Low rainfall over summer could dry up the water in storage for pumped hydroelectric dams, like the Snowy Mountains scheme in NSW and the Kiewa scheme in Victoria, which means less power and potentially higher electricity prices.
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