Lower prices, more competition: what the Australian energy market looks like in 2020
With the news that some energy retailers are announcing price decreases from July 1, many Australian households will be looking forward to seeing a difference in their energy bill.
According to new figures from Australian Energy Regulator’s (AER) State of the Market 2020 report, wholesale energy prices have been on a downward trend for the last 10 months.
What’s even more impressive is that wholesale energy prices haven’t been this low since 2015.
“Even before COVID-19 came along, we had seen significant reductions in wholesale prices and the Government will be evaluating the new prices on offer by the big energy companies against wholesale price reductions,” said Energy Minister, Angus Taylor.
“Affordable, reliable energy will help small businesses and industry to employ more and create more jobs as the Australian economy recovers from COVID-19.”
The AER explained that various energy schemes introduced to the market, like the ‘default market offer’ (DMO) has contributed to driving down prices.
Smaller retailers, such as Amber Electric and Powerclub, entering and stimulating competition within the national energy market (NEM) was also a factor.
Despite the increase in competition, it’s worth noting that the big three retailers (Energy Australia, AGL and Origin Energy) still occupy around 63% of small electricity customers and 73% of small gas customers according to the report.
How Aussie households can still save on their energy bills
The report also found that switching energy plans is still crucial for households looking to see a difference in their annual energy bill.
According to the AER, in January 2020, switching from the median standing offer plan to the best market offer (within a customer’s distribution zone) can save household’s an average of between $300 - $400 a year.
“The reduction in wholesale energy prices is good news for consumers with wholesale costs making up around one-third of a residential or small business customer’s energy bill,” said Taylor.
“The Government expects the large reductions in wholesale electricity prices to be respected by retailers.”
So if you’re ready to take a stand against your energy bill, head on over to our energy comparison tool or get started by entering your postcode below!
