{"id":61316,"date":"2020-06-03T04:15:44","date_gmt":"2020-06-03T11:15:44","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=61316"},"modified":"2021-07-25T07:15:56","modified_gmt":"2021-07-25T14:15:56","slug":"4-reasons-why-electricity-prices-are-rising-in-australia","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id61316-4-reasons-why-electricity-prices-are-rising-in-australia.html","title":{"rendered":"4 Reasons Why Electricity Prices Are Rising in Australia"},"content":{"rendered":"<p><a href=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/05\/power-lines.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-25233\" src=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/05\/power-lines.jpg\" alt=\"power lines\" width=\"395\" height=\"527\" srcset=\"https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/05\/power-lines.jpg 480w, https:\/\/lenpenzo.com\/blog\/wp-content\/uploads\/2014\/05\/power-lines-225x300.jpg 225w\" sizes=\"auto, (max-width: 395px) 100vw, 395px\" \/><\/a>It has been more than a century since Australia began supplying electricity to its local populace. Melbourne was the first city to build a power station, illuminating the city&#8217;s streets. At the turn of the century, nearly all streets in Australia were supplied with electric power. And by 1927, Australian households were finally connected to an electric power grid, to step out of the darkness, so to speak, and into the light.<\/p>\n<p>Today, Australians rely on electricity not only for lighting but to power nearly every aspect of their daily lives.<\/p>\n<p><b>Electricity Price Determinants<\/b><\/p>\n<p>The Queensland Competition Authority (QCA), who is responsible for setting electricity prices in Queensland, uses the Benchmark Retail Cost Index (BRCI) mechanism to calculate the regulated retail cost of electricity prices. The yearly BRCI is a function of the change in electricity supply costs over the load costs for the State. Translated to actual <a href=\"https:\/\/lenpenzo.com\/blog\/id663-approximate-energy-costs-of-your-home-appliances-2.html\" target=\"_blank\" rel=\"noopener noreferrer\">consumer electricity prices<\/a>, this means that consumers pay for four (4) electricity price components:<\/p>\n<ul>\n<li>The cost to create electricity<\/li>\n<li>The cost to build and maintain the power lines (transmission cost)<\/li>\n<li>The cost to build and maintain the network of poles and wires for electricity delivery to consumers (delivery cost)<\/li>\n<li>The cost to connect, bill, and manage electricity consumers&#8217; accounts (retail cost).<\/li>\n<\/ul>\n<p><b>Industry Challenges<\/b><\/p>\n<p>Today, the power sector is facing unique challenges. Global fuel prices are at a record high.<\/p>\n<p>The demand for electricity is growing by leaps and bounds. Add to that the increasing environmental adversities faced not only by the nation but by the entire planet. These factors easily compound an industry already beset by capacity demands exacerbated by <a href=\"https:\/\/lenpenzo.com\/blog\/id25623-pinpoint-your-home-energy-hogs-and-replace-them-with-these-2.html\" target=\"_blank\" rel=\"noopener noreferrer\">energy hogs<\/a>, infrastructure reliability, transmission and distribution requirements, and better environmental performance.<\/p>\n<p>In 2019, Ergon Energy Corporation Limited (Ergon) and ENERGEX Limited (ENERGEX), Queensland&#8217;s two distribution companies, had indicated their plan to increase their infrastructure investments over the next five years. They propose to invest around $11.9 billion to upgrade their distribution network infrastructures to meet current and future demands.<\/p>\n<p>Approximately $3.7 billion more will be invested to maintain the existing networks and other operational expenditures. These new investments will maintain the security and reliability of power supply and delivery to customers.<\/p>\n<p><b>Increase in population<\/b><\/p>\n<p>By the end of 2020, Queensland&#8217;s population is expected to see a sustained growth rate of 2.4%. Overseas migration will account for 50% of the population growth, natural population increase will be 37%, and interstate migration will account for the rest. The trend will be on the rise over the succeeding years.<\/p>\n<p><b>Change in customer preferences<\/b><\/p>\n<p>Customers nowadays prefer the use of energy-intensive electronic appliances such as mobile cellular phones, water heating systems, air-conditioning units, to name a few. On the other hand, they don&#8217;t want to make a deficit deal when it comes to shopping for the best rates and compare electricity providers on different online platforms. The adoption rate of information technologies in the household has increased by 5.9% in the past year. It&#8217;s expected to continue its upward trend as more and more households gain access to Internet broadband connections.<\/p>\n<p style=\"text-align: right;\"><span style=\"font-size: smaller;\">Photo Credit: urawa<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>It has been more than a century since Australia began supplying electricity to its local populace. Melbourne was the first city to build a power station, illuminating the city&#8217;s streets. At the turn of the century, nearly all streets in Australia were supplied with electric power. And by 1927, Australian households were finally connected to [&hellip;]<\/p>\n","protected":false},"author":93,"featured_media":36966,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","pmpro_default_level":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[459],"tags":[],"class_list":{"0":"post-61316","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-family","8":"pmpro-has-access","9":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.8 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>4 Reasons Why Electricity Prices Are Rising in Australia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lenpenzo.com\/blog\/id61316-4-reasons-why-electricity-prices-are-rising-in-australia.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"4 Reasons Why Electricity Prices Are Rising in Australia\" \/>\n<meta property=\"og:description\" content=\"It has been more than a century since Australia began supplying electricity to its local populace. Melbourne was the first city to build a power station, illuminating the city&#8217;s streets. At the turn of the century, nearly all streets in Australia were supplied with electric power. 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