Although our electricity usage may have skyrocketed during the Covid-19 lockdown, different strands of research have shown that wholesale electricity prices are on the decline.
More recently, industry researcher IBISWorld found that because wholesale prices have dropped to their lowest in five years, the success of coal-fired power stations has dropped, while investment in renewable generators is on the up.
“The closure of businesses across the economy has contributed to a sharp downturn in electricity demand from commercial markets,” said IBISWorld senior industry analyst, James Caldwell.
“At the same time, growth in the number of Australians working and studying from home has contributed to a strong upswing in electricity demand from residential customers.”
According to Caldwell, electricity demand is estimated to have fallen by 4% during the 2019/20 financial year - 2% of that figure can be attributed to the Covid-19 outbreak and the remaining 2% is due to an increased uptake in small-scale solar systems.
IBISWorld also predicts that households could see a difference in their annual bill, as the drop in wholesale prices will bring on a 15% decline in revenue for the electricity market.
Renewable energy forecasted to overtake fossil fuels
As the nation continues to move through the recession, it seems as though renewable energy is taking off.
IBISWorld research shows that electricity produced from renewable resources is expected to soar over the next five years, while the amount of electricity consumed in the National Energy Market this year alone is estimated to reach 20%.
Caldwell explained that this could be due to renewable energy systems becoming more feasible to build.
“The falling costs of establishing renewable electricity generation facilities has allowed renewable electricity to account for an increasing share of Australia’s energy mix over the past decade,” he said.
Solar electricity generation is also expected to rise annually at 14% over the next five years, compared to revenue for fossil fuel generation, which is expected to decline by 0.3% over the same period.
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