Early Closure of Eraring Power Station Could Be A Disaster For Energy Bills

Early Closure of Eraring Power Station Could Be A Disaster For Energy Bills

Emily Wood | February 17, 2022

As another large synchronous generator is earmarked for early closure, the peak body representing Australia’s commercial and industrial energy users, the Energy Users’ Association of Australia (EUAA), has cautioned that the impacts of an additional large asset departing the National Electricity Market (NEM) is likely to be higher wholesale prices. This, coupled with the costs associated with transmission expansion across the NEM will likely mean a much higher energy bill for all consumers.

“We are disappointed with the short notice of another generator closure – this has the potential to be a disaster for energy bills,” said EUAA Chief Executive Officer, Andrew Richards. “In order to ensure a minimal impact on all energy consumer bills, we need an orderly transition in energy markets, not short notice departures like this.”

This issue clearly demonstrates the critical work being undertaken by the Energy Security Board (ESB) to develop a consistent, national approach to the energy transition, and the essential need for coordination across states and commonwealth.

“Now more than ever we need collaboration between all parts of the energy market including with governments. We need governments and industry to work constructively together to find solutions that lead to the best outcomes for consumers,” said Mr Richards.

“As an array of solutions are being thrown on the table, consumers need improved transparency and a high degree of accountability so they can trust that their long-term interests are not being compromised.”

The transition in the NEM is happening at pace, but the speed of closures we are seeing is now a cause for concern.

We have increased transmission and infrastructure costs flagged in the Integrated System Plan (ISP), and we are likely to see increases in the total energy bill as we deploy new resources to manage system strength and reliability that need to be accelerated as large generation assets depart.

“The EUAA asks governments and the energy industry to work together and do more to protect consumers from price shocks while achieving an orderly transition. While we move to implement systems to reach our targets of net zero, we must ensure the least cost pathway is being pursued as we cannot leave customers in an impossible position where bills that are out of control,” added Mr Richards.

Combined, EUAA members employ over 1 million Australians, pay billions in energy bills every year and are desperate to see a national energy and climate change plan that puts downward pressure on electricity and gas costs.

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Media Contact: Emily Wood 0421 042 121


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