South Australia has the highest electricity prices in the world, according to new anaylsis.
Utilities expert and director of Carbon and Energy Markets Bruce Mountain predicted in June that energy price increases would see South Australia jump ahead of Denmark, which had the highest prices in the world.
Since then Mr Bruce has published results from a study on the subject, concluding the state’s prices are three times more than the United States and about 50 per cent higher than the United Kingdom.
According to the analysis, New South Wales had the fifth highest prices in the world, behind Denmark, Germany and Italy.
SA Energy Minister Tom Koutsantonis has labeled Mr Mountain’s modeling “flawed” and said it was “designed to capture a headline”.
Mr Koutsantonis said the modeling compared Australian power prices from 2017, through a currency convertor with European prices from 2015.
“This is not a like for like comparison, which may be why Mr Mountain refused to release the modeling to the government when he first made these claims in the media last month,” he said.
“However, I do agree with Mr Mountain that power prices are too high, both in South Australia and across the country, and that more businesses and households may seek to go off-grid.
“I met with major retailers last financial year and warned them that if they keep increasing prices, they risk losing customers who will abandon them in favour of solar-battery solutions.”
Mr Mountain told The AdvertiserSA’s prices were caused by a combination of avoidable problems, particularly the costs of creating energy, and delivering it to households.
He said it was becoming cheaper for most people to take charge of their own electricity at home and move way from the shared grid.
“It is already cheaper for households with a north-facing roof to meet their own supply with a combination of battery and solar, and those costs are continuing to decline,” Mr Mountain said.
“The irony is that there will be better (price) outcomes, but not from the system as we know it.
“There will probably be a big shift from central (electricity access), to local. It’s a no-brainer for someone who has an east, west or north-facing roof to put as much solar on as they can.”
In April, the South Australian Government announced a $550 million energy plan to help solve the state’s energy crisis.
“Our energy plan includes a range of measures designed to put downward pressure on power prices, including using the state government’s own electricity procurement to bring a new participant into the market and building the world’s largest lithium-ion battery,” Mr Koutsantanis said.
“Ultimately, we need the federal government to also back the recommendation of their own chief scientist and implement a market mechanism that drives new private sector investment in electricity generation.”