South Australia’s high electricity prices tipped to take years to drop

By Shubhda Khanna Nag ·

South Australia is known to have the country’s highest electricity costs and according to Premier Jay Weatherhill, it will take years before the state’s electricity prices will see a drop to the levels of eastern states, reported The Australian.  

The exorbitant electricity prices in South Australia are seen to be a result of the state’s rapid switch to renewable energy alternatives, with SA switching from producing 99% fossil fuel electricity in 2003-04 to more than 40% wind and solar power in 2014-15.

“Clean, green, renewable energy — which is cheaper than other forms of generation — will in the long term drive prices down,” he said. “Our advice from the national electricity market operator is that within a couple of years we’ll be having very similar prices to the eastern states.”

The Premier also said that the reversal in energy price trends depends on whether the state could get its reforms through the Council of Australian Governments, which is due to meet on August 19.

“There is no future for dirty, coal-fired power stations,” he told FIVEaa radio. “South Australia is leading the nation in renewables ... it will give us a technological advantage.”

Other reasons for the ‘absurd’ energy costs in SA include rising gas prices and a planned upgrade to an interconnector with Victoria. In fact, recent reports suggest that very high wholesale gas prices across Australia have had a major role to play in South Australia’s gas-fired power options becoming so exorbitant. This then leads to electricity costs shooting up when wind generation is low.

The record high electricity prices in South Australia have also resulted in the state reporting the highest number of disconnections. A recent study revealed that between January and March, more than 0.30 per every 100 customers or more than 2,500 South Australian residential customers were disconnected.

According to Mozo calculations, residents could make big savings by switching to the cheapest electricity plan in their area. In fact, Mozo’s online electricity comparison tool shows the difference between the cheapest and most expensive plan for a 3-person household in Adelaide is $198 per quarter.

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