ACT households are set to benefit from some of the biggest power bill cuts in the country as a huge injection of renewable energy forces wholesale electricity prices down, according to the federal government's chief energy adviser.
In welcome relief for stretched family budgets, the Australian Energy Market Commission expects a two-person household in the ACT to save $134 on their annual power bill by 2022 as big renewable energy projects come on line.
Commission chairman John Pierce said an extra 5000 megawatts of capacity, involving a mix of wind, solar, gas and hydro projects, would be added to national power grid in the next three years, and investors have committed to a further 2500 megawatts. By comparison, the nation's largest coal-fired power station generates about 2000 megawatts.
Mr Pierce said the big increase in supply was putting downward pressure on wholesale electricity prices across the national energy market.
According to the commission's analysis, the annual electricity bill in Canberra will fall 7 per cent to $1803 by 2021-22. Only Queensland (20 per cent) and New South Wales (8 per cent) will receive bigger savings.
The estimates are based on a representative residential customer. In the ACT this a two-person household on a regulated standing offer with electric hot water and no mains gas connection consuming 7151 kilowatts of electricity a year.
ACT Minister for Climate Change and Sustainability, Shane Rattenbury, said the report was "good news for ACT consumers".
Mr Rattenbury said the sudden closure of Victoria's Hazelwood coal-fired power station in March 2017 had caused electricity prices across the national market to spike, but the subsequent influx of cheap renewable energy into the system was unwinding that effect.
But the commission's analysis shows that, despite the decline, Canberra households will continue to face some of the biggest power bills in the country.
While the typical ACT household will be paying $1803 a year in 2020-21, similar residents in New South will be charged $1187 and those in Victoria, just $1082. South Australians face the highest costs, which the annual bill for a typical household there expected to reach $1826, followed by Tasmanians on $1813.
But the differences are driven mainly by consumption. According to the commission, the typical Canberra household consumes almost double the electricity of one in Victoria, and substantially more than those in NSW.
Mr Rattenbury said the differences were mostly due to climate, with Canberrans and Tasmanians expending a lot of energy to heat their homes in winter. Though South Australians consumed much less energy on average, they faced some of the highest kilowatt per hour charges in the country.
The ACT minister said the report showed that Canberrans actually had some of the lowest kilowatt per hour rates in the country - 8.28 cents this financial year, compared with a national average of 13.36 cents and 16.82 cents in SA.
According to the AEMC, many Canberrans are missing out on cutting their power bill even further by not shopping around.
Mr Pierce said around half of ACT households were on standing offers, the lowest of which were almost $370 a year more than the best market price. He urged consumers to use online comparison sites like the Australian Energy Regulator's Energy Made Easy page to get the best deal.
Energy market expert Dylan McConnell, of the University of Melbourne's Climate and Energy College, said current cheap renewable energy prices were likely to be sustained.
But he warned that the conditions supporting the recent surge in investment were fading and pace at which more capacity was added to the national energy market would slow.
Mr McConnell said that as the wholesale price of electricity fell, the incentive for investors would shrink.
At the same time, policies aimed at supporting renewable energy investment had ended or were phasing out, exacerbating the slowdown.
Mr Rattenbury said one of the biggest challenges for the country was not to increase energy supply, but to boost the capacity of the transmission network.
The ACT purchases power from across the electricity market, and the minister said "it is very important for the ACT to ensure that the [suppliers] we have contracted with can get access to the market".