What’s happening in the wholesale electricity market
The power market is changing. Here are three of the main supply factors leading to the change:
- Unscheduled generation (wind and solar): Even though wind and solar generation offers advantages (like zero emissions and no fuel or resource cost), its unpredictability can cause issues when customers are on fixed rates because customers require a continuous supply.
- Gas-fired generation: Gas-fired generation is on the rise as a balancing source of generation for Australia because of its flexibility. This has caused gas prices to rise across the market, affecting prices of the electricity market simultaneously. For gas-fired power plants to recover higher input costs, electricity pricing will need to increase.
- Coal generation: With the closure of the Hazelwood Power Station on 1 April this year and the questionable future of coal-fired generation, fixed-rate retailers have taken to rising prices in the retail contract market.
What does this mean for you?
Although the peaks are rare, those on fixed-rate prices are left with the higher rate and without any access to the lows of the market. For businesses, that has direct impact on their bottom line.
It’s simple. Ask yourself, Why should I deal with high power prices every day of the year?
With all this going on in the market, as a business owner it might be wise to consider an alternative to a fixed-rate contract.