Australia’s solar capacity is currently the highest globally. Australian households could pay $77 less in electricity bills in 2024. The Australian Energy Market Operator projects that renewables will meet 100% of household electricity consumption at specific periods of the day by 2025 if wind and solar development continue at current rates.
Growth in power generation from renewables, especially solar, is reducing the demand on the electricity grid. You can become self-sufficient by generating and storing your power.
In this post, we’ll discuss the latest happenings in the Australian solar industry.
Read on to find out how renewables are driving down electricity costs across the country.
What are renewables?
Renewables are clean energy sources that are naturally replenished. They may include geothermal heat, solar, wind, tides, and waves. A significant percentage of the energy consumed by humans is renewable energy.
A large amount of Australia’s power comes from coal, but that share is reducing thanks to the nation’s first offshore wind project. The project aims to start building 2.2 gigawatts of offshore wind from 2025.
With the closure of the NSW’s Liddell coal fire power station, a $20 rise is forecast in 2022-23. Lost capacity will be replaced by a combination of solar, gas, wind, and batteries.
Australia is undoubtedly a renewable leader thanks to the wide acceptance of solar by households. As of December 2020, almost one in four households in the country have solar installed.
The proposed wind and solar projects in Australia are enough to power almost all the country’s demands.
A $77 yearly drop on household power bills is underway as developers bet on renewables.
According to the Australian Energy Market Commission, household electricity bills are expected to reduce by $77 a year thanks to advances in renewable energy across the country. After its annual survey, the AEMC projected that Queensland would blaze the trail among the National Electricity Market (NEM) states.
The typical Queensland residential bill will reduce by 10%. This means a fall from $1,226 in 2020-21 to $1,100 by 2023-24.
The next most significant drop in the residential bill is expected in Victoria, with a $99 reduction in the average cost of power across the state. That means a fall from $1,290 in 2021 to $1,191 by 2023-24. With this three-year trend, household power bills will return to 2017 levels.
However, the 1,680-megawatt Liddell coal-fired power will shut down in 2022-23 and disrupt this downward trend. The shutdown will drive an increase in the wholesale price of power in Australia. But prices are expected to reduce again with the addition of new large-scale solar plants.
With a 1,393MW commitment to new wind farms and 2,671MW of new solar, developers are betting on renewables to drive down the cost of household power. They have also committed to 470MW of large batteries and 904MW of new gas-fired capacity across the NEM.
NSW is leading with 2,287MW of new plants, followed by Queensland with 1,557MW and Victoria with 1,354MW of new plants. The AEMC projects that the increase in the cost of network investments will likely accelerate over the next decade to meet the need for more network investment to send a dispersed new generation to the grid.
According to Angus Taylor, the Energy Minister, further drops in the price of electricity will add more money to pockets of households and families, which is needed in these times, as the country recovers from the impact of covid-19.
He further stated that thanks to the measures put in place by the government, they have recorded a 10 per cent drop in household power bills – a year-on-year decline of household electricity costs for 11 quarters in a row. In their release on Wednesday, the Australian Bureau of Statistics said that renewable energy supplies upped by 15 per cent in 2019-20, extending the five-year trend.
ABS’s Jonathon Khoo reported that wind, solar, and hydro contributed about 222 petajoules of energy to domestic supplies. He also stated that one PJ could provide 47,000 Australian homes with power for 12 months, and solar is a major driving force of this increase thanks to the expansion of large-scale solar photovoltaic power stations.
In 2019-20, there was a 5.4% drop in energy consumption by average households, totalling 125 gigajoules. On the other hand, the industry consumed 3.6 % less per dollar unit of output. Both the aggregate energy intensity use by industry and household energy use extended their downward trends.
According to ABS, liquefied natural gas exports increased by 6% in 2019-20 from a year earlier. Black coal shipments eased 0.6% to 11,062 petajoules from 2018-19 to 2019-20.
Prices rise in the ACT
It is only in the Australian Capital Territory that power bills are predicted to increase. According to Ms Collyer, the predictions show a $99 rise in power bills in this financial year, and a $123 rise in the following, before a drop by $145 in 2023-24.
The forecast by 2024 is a net increase of 4 per cent in the ACT. This price rise is due to the rising wholesale and network investment costs. Ms Collyer also said that many ACT consumers, 28.7 per cent, are currently on standing offers instead of cheaper market offers.
She added that the large scale Feed-in Tariff Schemes will cause a rise in environmental costs in the ACT.
Shutdowns in South Australia
With the shutdown of Osbourne units and Torrens Island, the price of household power is forecast to drop by $35 in South Australia over the next few years. According to Ms Collyer, the integration of renewables in a smart way enables lower costs for consumers and lower emissions.
The network investment cost in South Australia is forecast to increase due to the steep rise in electricity being exported to the grid from households. This rise is predicted to accelerate over the next decade.
South Australia has recently set a world record for generating more power from solar than it used for some time on five different days.
How renewable energy will impact Australian electricity bills
Many states in Australia will enjoy much lower electricity costs thanks to renewable energy. This is excellent news given the unending rise in the cost of living and food in the country. Lower electricity bills mean more money in people’s pockets.
Renewable energy has proven to be a surefire way to drive down electricity costs, as Aussies can expect to save on average $77, according to the earlier mentioned AEMC’s annual survey. Electricity prices in Tasmania are expected to fall by $125 or 6 per cent by 2023-24. But prices are predicted to rise for people in ACT 4 per cent, increasing electricity bills to $2,081.
According to the chair of AEMC, Anna Collyer, “We can now see far enough into the future to be confident that power prices paid by consumers will continue to trend downwards over the next three years, despite the staged exit of Liddell power station in 2022 and 2023, one of the biggest coal-fired generators in the national electricity market.”
She also said that the rise in the price of network investments would likely accelerate over the next decade due to the exportation of renewables back to the grid. Price outcomes in the coming years will depend on regional differences across territories and states in the national electricity market.
Also, the amount of energy you consume, the type of energy offer you have, and whether you have renewables will affect your energy bill. The Australian Bureau of Statistics released data that showed renewable energy supplies rose by 15 per cent in 2019-20, with hydro, wind, and solar as the biggest contributors.
Conclusion
Australia will enjoy much lower electricity costs in the coming years, thanks to renewables. There is a decrease in demand on the electricity grid as more and more households are becoming self-sufficient.
The Australian Energy Market Operator forecasts that renewables will meet 100 per cent of household electricity consumption during certain periods of the day by 2025 if wind and solar development continue at current rates.
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