Cost drivers of recent retail electricity prices for small NSW customers

17 Dec 2018

Over the last ten years, Australia’s electricity supply industry has undergone significant changes. In addition to the deregulation of retail prices, NSW saw a significant rise in network investment during the early and middle parts of that ten-year period. Feed-in tariffs designed to encourage the installation of rooftop photovoltaic panels (rooftop solar) as well as a scheme designed to increase energy efficiency (the Energy Savings Scheme or ESS) were introduced. Nationally, a carbon emissions tax was introduced, and the existing Renewable Energy Target (RET) scheme was enhanced. Encouraged by these policy initiatives and falling technology costs, the penetration of large-scale renewable generation increased rapidly. In recent years, the changing generation mix, coupled with higher fuel prices for gas-fired plant and ongoing uncertainty regarding longer-term emissions reduction policies, has begun to influence both the stability and affordability of the power grid.

In its recent Retail Electricity Pricing Inquiry Final Report, the Australian Competition and Consumer Commission (ACCC) estimated that residential customers in NSW saw a real increase of 28% in their electricity bills and a real increase in their effective price of around 52% between 2007/08 and 2017/18.

Our review is focused on the changes in prices and costs between 2017/18 and 2018/19. We examined cost trends and drivers in recent years when analysing certain components of those retail costs and when considering the implications we should draw from the results of our analysis. In this regard it is relevant to note that the ACCC concluded that the changes in a number of retail electricity cost components were not uniform over the ten-year period to 2017/18 and that some components exhibited little or no change in recent years.


Publication Details
License Type: 
All Rights Reserved
Published year only: 
Subject Areas
Geographic Coverage