Energy prices in Australia freezing you in your tracks? Let’s make sense of it

piggy bank on top of coins in front of energy meter

If you have been keeping up with news and current events, you’ll have heard about the energy crisis occurring in Australia.

It’s all very confusing but the gist of it is, energy prices are rising. So let’s dive into some of the details around this story.

Higher energy prices: what’s caused them?

There are three main reasons why energy prices are increasing in Australia.

Firstly, the end of COVID lockdown restrictions in many countries has meant that the demand for energy has increased worldwide as businesses are getting back on their feet and people are going out more.

In addition, the Russia - Ukraine conflict has made this problem worse. Russia is one of the biggest energy exporters and many countries have decided to impose sanctions on Russia’s oil and gas exportation in recent months. This has meant that European countries as well as others around the world have had to source their energy elsewhere, causing a spike in energy prices.

Lastly, Australia is still largely reliant on coal but many of our big coal plants are ageing and failing more regularly, with many even being marked for closure. Our coal supply has also been affected by the recent flooding and these factors have all contributed to the increased price of energy.

What does this mean for me and my energy bill?

Well, as you have probably already suspected, your energy bill may increase due to the rising costs of energy.

According to the Australian Energy Regulator (AER), increases of up to 18% on power bills will come into effect from July. Based on a release by the AER, NSW customers will be paying between $119 and $227 more on their power bills next financial year.

However, based on figures by the Australian Competition and Consumer Commision, the increases will add more than $250 to your bill a year, in some cases.

So, how to save money on energy

Now that we are in winter, it’s expected that you will be using more energy to keep your house warm and this will also cause your electricity bills to increase.

In order to reduce your energy use, there are some steps you can take:

  • Block draughts and when the heater is on close off areas of your house you’re not using
  • Take shorter showers
  • Wear warmer clothes when inside so you don’t need as much heat to stay warm
  • Switch off unused devices around your home.

In addition, you may also want to review your energy plan and compare other plans to see if you could be saving money with a different provider. Switching energy providers isn’t hard and could save you money so it is definitely worth it!

For more tips and advice on how to save on energy or compare energy prices, check out our energy home page.

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