A Tasmanian energy consultant is at odds with a recent Australian Energy Market Commission report, which predicts a 6.5 per cent decrease in Tasmanian energy prices by 2019-20.
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Principal consultant at Goanna Energy, Marc White, instead believes energy prices will rise by the rate of inflation over this period.
The AEMC’s report, released on Monday, said the decrease would come from a 25.4 per cent in wholesale electricity prices over the next two years.
However, Mr White said the AEMC’s predicted drop in wholesale electricity prices is unlikely, when taking into account the current 2019-20 wholesale electricity prices on the futures market.
A spokeswoman from the AEMC said the commission still stands by the assumptions made in the forecast report.
“The price changes set out in the report are estimates, not forecasts,” she said.
“They are based on modelling which aims to show what’s driving changes in household electricity bills.
“However, provided there are no significant changes to the assumptions used in our modelling, we expect energy prices in Tasmania to fall from mid 2018 in line with our estimates.”
Minister for Energy Guy Barnett threw his weight behind the report, and said “lowering energy prices is the top priority under [the government’s] Tasmania First agenda”.
“The government is reviewing how wholesale prices are set to see if there are further price reductions possible,” he said.
“We have a target to have the lowest prices in the country by 2022 and this report shows we are already on track to meet this.”
The AEMC report estimates wholesale electricity prices, which make up 28.1 per cent of Tasmanian electricity costs, will sit at 7.05 cents per kilowatt-hour in 2018-19, a reduction from the state government’s current cap of 8.4 cents per kilowatt-hour.
However, Mr White said the current future market electricity prices, for 2018-19, sit at 9.2 cents per kilowatt-hour, indicating that upward pressure on prices is likely.
“In Tasmania, the state government capped the wholesale market at 8.4 cents per kilowatt-hour for the current financial year, but if we look forward to 208-19, the market price for that energy is 9.2 cents.”
“Prices in Tasmania will rise by CPI, unless there's further intervention locally [by the state Liberal government].”
Stefan Boscia
Stefan came to The Examiner after working as a copywriter at a digital media firm in Melbourne and interning at The Conversation. He is enthusiastic about reporting on business, local government and environmental issues. When he is not chained to his work desk, Stefan enjoys getting brunch, reading Saul Bellow novels and watching Carlton games.
Stefan came to The Examiner after working as a copywriter at a digital media firm in Melbourne and interning at The Conversation. He is enthusiastic about reporting on business, local government and environmental issues. When he is not chained to his work desk, Stefan enjoys getting brunch, reading Saul Bellow novels and watching Carlton games.
