Why Are Electricity Prices Higher In Some Parts Of Australia?

Why Are Electricity Prices Higher In Some Parts Of Australia?

The electricity cost and Electricity comparison in Australia has been rising ever since 2015. The rise was about over 130% from 2015 to 2017, which was very high. Households and businesses have been affected by the expensive electricity bills. Many reasons are in play behind the expensive cost of electricity. Here are some of the reasons:

  • Electricity accessibility

Accessibility in some parts of the country has been a significant problem leading to higher electricity prices. Bushfires have been a significant problem since it has been destroying the electric poles.

Upgrades of the network channels and the accessibility mechanisms have been claimed to cost a whole lot of money than they should. The multimillion upgrades and maintenance have reflected on the consumer’s bills making them quite expensive and rising.

The cost of accessing electricity in some areas is almost twice as higher as the cost of the electricity itself. In this capacity, the high prices are broken down into; the cost of the poles and the wires, the cost of environmental policies which affect the accessibility, and the retail/wholesale prices, which change frequently based on the supply and demand chain.

  • Failing electricity policies

Many factors contribute to high electricity prices in Australia, but none beats some government policies about Electricity comparison that have failed over the years. The government has been making some decisions that have driven the national electricity market in the wrong direction.

There has not been any working policy that the government has put in place to give the citizens affordable, reliable, and clean electricity. The so-called government green schemes have contributed by a significant percentage to the increase in electricity prices in Australia.

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Regardless of the problems associated with the failed government policies, there have been reported issues around the electricity market structure. These issues include the decisions by the government that have led to a more concentrated market that hikes the electricity prices.

  • Retail Margins

Most Australian folks have been victims of some confusing bills from the electricity retailers, who are always after high profits. Consumers have been paying very high electricity prices.

This is mainly because the retailers can set electricity bill structures without transparency or at least an explanation to the consumers on what they are paying for.

Getting a discount has become a significant problem, too, as complicated terms are attached or associated with the values. These discounts are conditional, ranging from early payments to penalties incurred if the bills are paid late.

  • High electricity demand

When the demand is lower, the electricity cost is low and vice versa. In some parts of Australia, there is a very high electricity demand, leading to high electricity costs and bills.

  • Coal’s low demand

Australia is one of the largest producers of brown coal. Sadly, there is no market for coal from outside the country. Most of the coal is consumed locally by the industries, especially those associated with electricity production.

Since coal is readily available, you expect electricity prices to be below. But why is it expensive? It is simply because the retailer or the electricity providers are after hefty profits and do not care about the consumers.

Final thoughts

In conclusion, some of the reasons mentioned above may be out of any citizen’s control (Consumer capability). Therefore, on a fundamental level or on average, try to self-audit and see how you consume your electricity and minimize wastage of energy, which translates to cost and Electricity comparison. Hence before using any fuel, try knowing how much will be lost or wasted and how to reduce the energy wastage.

Also Read: Benefits of Renewable Energy


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