Causes of higher power prices remain as government offers $150 rebate

ABC News

24 Mar

Australians will continue to pay less on their power bills under an extended rebate announced by the federal government on Saturday. But the move has faced criticism for failing to address the root ...

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One of the best stock trading platforms in Singapore.","ogImage":"https://c1.itigergrowtha.com/portal5/static/media/og-logo.be62fbe1.png","ogUrl":"https://www.itiger.com/news/2522871240"},"companyName":"Tiger Brokers"},"pageData":{"isMobile":false,"isTiger":false,"isTTM":true,"region":"SGP","license":"TBSG","edition":"fundamental"},"__swrFallback__":{"@#url:\"https://stock-news.skytigris.cn/v3/news\",params:#id:\"2522871240\",edition:\"fundamental\",,,undefined,":{"share":"https://ttm.financial/m/news/2522871240?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2025-03-24 13:33","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2522871240","market":"hk","top_or_hot":-1,"title":"Causes of higher power prices remain as government offers $150 rebate","media":"ABC News","content":"<div>\n<p>Australians will continue to pay less on their power bills under an extended rebate announced by the federal government on Saturday. But the move has faced criticism for failing to address the root ...</p>\n\n<a href=\"https://www.abc.net.au/news/2025-03-24/root-causes-of-higher-power-prices-remain-as-labor-offers-rebate/105089488\">Source Link</a>\n\n</div>\n","source":"abcau_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Causes of higher power prices remain as government offers $150 rebate</title>\n<style 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move has faced criticism for failing to address the root ...</p>\n\n<a href=\"https://www.abc.net.au/news/2025-03-24/root-causes-of-higher-power-prices-remain-as-labor-offers-rebate/105089488\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://www.abc.net.au/news/2025-03-24/root-causes-of-higher-power-prices-remain-as-labor-offers-rebate/105089488","article_id":"2522871240","we_media_id":null,"thumbnails":[],"rights":{"source":"abcau_stock","url":"https://www.abc.net.au/news/2025-03-24/root-causes-of-higher-power-prices-remain-as-labor-offers-rebate/105089488","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2522871240","pubTimestamp":1742794432,"columns":[],"sourceInfo":{"source_id":"abcau_stock","name":"ABC News"},"weMediaInfo":null,"summary":"Australians will continue to pay less on their power bills under an extended rebate announced by the federal government on Saturday.But the move has faced criticism for failing to address the root cause of Australia's high power prices.Here's a breakdown of what's needed to make power more affordable and how the major parties plan to tackle Australia's energy problem.What's the rebate?The cost of energy boils down to several factors, some of which are outside the control of government or the industry.Here's a basic outline of how it works.The wholesale price of electricity changes throughout the day, depending on how much demand there is at any given time.Every company selling electricity at that time is paid at the rate of whoever is the most expensive generator in that period.Often, gas is the most expensive electricity, but is essential to the energy mix as it’s used to top up supplies, and keep the lights on, when other generation falls.So even if you're not using much gas, it sets","collect":0,"end_time":0,"defaultTopTitle":"abc.net.au","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"政府提供150美元回扣，电价上涨原因依然存在","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AER":1,"AER.AU":1,"XAO.AU":0.9,"XJO.AU":0.9,"XKO.AU":0.9},"content_text":"Australians will continue to pay less on their power bills under an extended rebate announced by the federal government on Saturday. But the move has faced criticism for failing to address the root cause of Australia's high power prices. Here's a breakdown of what's needed to make power more affordable and how the major parties plan to tackle Australia's energy problem. What's the rebate?The federal government will extend its energy bill subsidies until the end of the year.From July 1, every household and about 1 million small businesses will see $150 in rebates automatically applied to their electricity bills in quarterly instalments.But your next bill won't necessarily be cheaper than the last.That's because it follows a similar rebate of $300 given by the federal government from July 1 last year.The Australian Bureau of Statistics estimates the first round shaved about 25 per cent off electricity prices.Does this help long-term?Speaking with ABC News Daily, the Grattan Institute energy expert Alison Reeve said a rebate that better set Australians up for the future would be preferable.The rebate isn't as big as the last one and won't go on indefinitely, either.\"It made sense in 2022, when everyone had a shock rise in prices, and that was due to factors that were entirely outside the government's control,\" she said.\"I think it makes less sense now, particularly because even though prices are high now, they've moderated quite a bit and in some ways, they're coming back to where they would have been anyway.\"It's actually possible that some consumers are now being overcompensated through the bill relief.\"Ms Reeve said a measure that would see consumers \"get something for the money\" would do better at shrinking future power bills.\"That is, to subsidise peoples who, say, upgrade their appliances to more efficient ones, or insulate their homes, so that even when prices are high, overall bills will be lower.\"She noted the rebate also doesn't do anything to address why energy is so expensive.That means when the rebates stop, Australians will be back to paying high prices.So what are the major political parties doing to address Australia's energy problems long-term?To weigh up what they're offering, let's first take a look at what's causing the high prices.How are energy prices set?The cost of energy boils down to several factors, some of which are outside the control of government or the industry.Here's a basic outline of how it works.The wholesale price of electricity changes throughout the day, depending on how much demand there is at any given time.Every company selling electricity at that time is paid at the rate of whoever is the most expensive generator in that period.Often, gas is the most expensive electricity, but is essential to the energy mix as it’s used to top up supplies, and keep the lights on, when other generation falls.So even if you're not using much gas, it sets the price of all electricity when it's in the market.Because the cost of gas is particularly high right now, it's driven the price of electricity much higher than it used to be.Why is gas so expensive?International market Electricity powerlines in light industrial suburb,  August 22, 2022,  Malaga, Perth.(ABC News: Andrew O'Connor)Australia exports a lot of the natural gas it produces, and in turn, that drives prices up at home.Companies selling gas tend to choose to supply to places with the highest price, which most often tends to be in the international market.It means Australia must match the international price to get supply.War in UkraineThe war in Ukraine caused a big jump in energy prices across the world.Prior to the conflict, 440 million people in the European Union relied on Russia for up to 40 per cent of their natural gas supply, through the Nord Stream gas pipeline.President Vladimir Putin started siphoning off large parts of that supply in retaliation to economic tariffs placed on Russia for invading Ukraine. Nations that were still receiving gas from Moscow began working toward buying from other nations.That increased demand for natural gas from elsewhere in the world and drove prices up.Post-pandemic Workers dismantle barriers at a residential area, as the city prepares to end the COVID lockdown in Shanghai.(Reuters: Aly Song)During the pandemic, gas prices were quite low in Australia and overseas, thanks to reduced demand.But prices started to creep up again as the world started to reopen and people went back to work.How do renewables fit in?Ms Reeve said while there is some cost tied to green energy, it's not to blame for the high prices we're seeing at the moment.She said the costs and savings of renewable energy would likely cancel each other out.That’s because Australia is building 10,000 kilometres of infrastructure across the country to connect renewables projects to the grid, the cost of which is passed on through energy bills. \"Even though that generation is less expensive, we do have to build a new network in order to connect to it,\" she said.\"So those two things might balance out, and we might not end up with that much change in bills.\"Will prices go down?It's unlikely.While energy prices fluctuate a fair bit, the long-term trend has seen them rise slightly more than inflation.Ms Reeve said the better question to contemplate would be when will energy be more affordable?She said the answer would likely come down to three factors, being when Australia:Uses less energy overallNo longer relies on internationally-traded fuels such as coal and natural gasMakes renewables and energy-efficient appliances more accessibleWhat long-term plans have parties put forward?With all that background covered, let's dive into what the major political parties propose as solutions for tackling Australia's energy sector.LaborShort-term \"They get the bill, they open it up, they see the figure, they see a whole lot of other numbers that go to how that figure was arrived at, and that's where their interest understandably comes to an end\", said Justin Oliver, an Australian Energy Regulator Board (AER) Member of consumer behaviour.(ABC News: Natasha Johnson)As we discussed above, Labor's plan for short-term relief is to provide a rebate of $150 on every household's next power bill.That's expected to go through parliament this week.Labor's left the door open to extending the rebate in the future, if elected, too.\"We keep these cost of living measures under more or less constant review, we'll keep that under review from budget to budget,\" Treasurer Jim Chalmers said on Saturday when announcing the measure.Medium and long-term Anthony Albanese tested positive for COVID on Thursday, just 11 days into the campaign.(ABC News: Adam Kennedy)Labor plans to continue pursuing a future in renewable energies such as solar, wind and hydrogen and hopes to make Australia a \"renewable energy superpower\". Having been in government since 2022, the party has already begun work on several policies around this under what it calls Future Made in Australia. The economic plan aims to unlock private sector investment in five priority industries, including renewable hydrogen and clean energy manufacturing.Investments introduced so far have focused on ramping up renewable projects and incentives for training or upskilling to create a workforce for the renewable sector.CoalitionShort-term Leader of the Opposition Peter Dutton releases the Coalition's nuclear power plan costs in Brisbane, Friday, December 13, 2024.(AAP: Russell Freeman)The Coalition so far hasn't proposed any short-term measures to make power bills more affordable.Opposition Leader Peter Dutton has criticised Labor's one-off payments as being inflationary and for not addressing the long-term challenges.The Coalition has said it \"won't stand in the way\" of the rebates, but don't expect to see any more if the government changes hands at the upcoming election.Medium-term The liquefied natural gas will be regasified at Port Kembla before it is distributed into the east coast gas system.(ABC Illawarra: Tim Fernandez)Mr Dutton plans to revive former prime minister Scott Morrison's \"gas-fired recovery\" plan to cut energy bills.If elected, the Coalition says it would dramatically increase the domestic supply of gas.It's understood the Coalition is considering a series of \"carrots and sticks\" to encourage gas generators to keep supply in the domestic market in return for softer regulations, but these are yet to be outlined.Mr Dutton declared in September he would be the \"best friend\" the mining and energy sector \"will ever have\".Long-term Photo of nuclear power station chimneys(Pexels: Rob; license)The Coalition's big-ticket proposal is to transition Australia to nuclear energy.It's an approach that's been widely criticised on both cost and environmental impact.That plan would start with two plants in 2037 and seven by 2050.But in June last year, Alan Finkel, a former chief scientist of Australia, told the ABC it would take 40 to 50 years to build a fleet of nuclear power stations.\"I can't imagine us starting one until, as I said, the mid-2030s, which means realistically, we wouldn't have anything till the early 2040s,\" he said.Posted 18h ago18 hours agoMon 24 Mar 2025 at 5:33am, updated 17h ago17 hours agoMon 24 Mar 2025 at 6:39amShareCopy linkFacebookX (formerly Twitter)Related topicsAustraliaFederal GovernmentUtilities","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1}}}