The chaos on the mainland that saw some wholesale electricity prices briefly triple this week are among the reasons why Tasmanians will face electricity price increases of between 5-10 per cent from July, and gas hikes of perhaps 10 per cent, a Hobart-based energy market analyst has said.
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Wholesale electricity prices in the eastern states shot up to nearly $1000/MwH this week, from $300-$400/MwH before sliding back, as a large proportion of coal-fired generators remained closed, and a cold snap in the southern states spiked energy demand.
Gas prices likewise surged as gas generators were switched on to compensate for the shortfall in coal generation, and as gas producers shipped more gas offshore to take advantage of higher international prices, leaving south-eastern states undersupplied.
Marc White, principal consultant at Goanna Energy Consulting in Hobart, said these mainland price developments were among the reasons he expected the agency responsible for setting Tasmania's controlled prices to hike electricity tariffs by between 5 per cent and 10 per cent later this month.
"Hydro is obliged to price under a [nationally regulated] model which takes about 80 per cent of its lead from Victorian forward market prices, and about 20 per cent from rolling 12 month inflows into its dams," White said.
The increases should start to show up in Tasmanians' power bills from July 1, with average households paying about $200 per annum more if prices rise by 10 per cent.
Meanwhile Tasmanian gas prices could "easily" rise another 10 per cent, he said, as Australia's eastern states face a shortfall.
The gas price hike could hit the state's large industrial users hardest, he said.
"Large contracted natural gas business consumers are in for a price shock, where they currently pay around 2 cents per megajoule, the percentage cost increase will be a significant dollar and percentage amount," he said.
At a press conference on Thursday, new energy minister Chris Bowen said the energy upheaval was "serious", but was being managed.
He confirmed he had spoken with energy ministers from the eastern states, including Tasmania's Guy Barnett, as well as the energy market operator. These regulators have taken steps to guarantee gas supply to the market, he confirmed.
Mr Bowen also sought to blame the former federal coalition government for the situation.
"The former government's nine years of denial and delay ... have left Australia ill-prepared."
Treasurer Jim Chalmers meanwhile said a measures to control energy prices were under consideration, including price caps and triggering a mechanism that would oblige gas producers to sell more of their production domestically.
Frank Calabria, the chief executiveof Origin Energy - Australia's biggest electricity seller - meanwhile called for the government to help get troubled coal-fired power stations working again.
His company this week shocked investors by slashing forecast profits because wholesale electricity prices are "orders of magnitude" higher than what sellers can recover.
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