Get ready, your power bills will soar this summer
ELECTRICITY bills are set to soar this summer, particularly in the eastern states and South Australia to top the highest power prices in the world..
And the reason for the price hike is a surge in the price of gas, as much as 40 per cent higher by January next year than the 2018 average, The Australian reported.
Worst off is expected to be South Australia, which already has among the highest power prices in the world.
The state's renewable energy policies mean it relies on more than 50 per cent of gas generation to power homes and industry.
Australian Power Project chief executive Nathan Vass told The Australian that domestic gas prices could jump to $15/GJ in January and February compared with this year's average of $0.68/GJ.
"The impact on electricity prices will be huge," he said.
Mr Vass said modelling by the Australian Competition & Consumer Commission (ACCC) showed that for each $1G/J hike in gas, the wholesale electricity price went up by $11 per megawatt hour.
Last week, the ACCC forecast gas prices would rise to almost $15 over the coming summer.
At a gas price of $10G/J, South Australia had an average spot price of $90 per MWh.
"So if gas jumps to $15G/J you could see the average wholesale price hit $140MWh," Mr Vass said.
"The closure of cheap and reliable coal-fired generators and the shift to gas-peaking plants has left South Australia more vulnerable to gas price shocks than any other state.
Proposal to build a second electricity interconnector between SA and NSW would reduce reliance on gas generation.
Federal Energy Minister Angus Taylor, however, said a gas price rise would only cause a "minimal" electricity price hike.
He would be watching electricity retailers closely to ensure they instead brought down prices.