Cause of spikes in South Australia’s electricity prices revealed…


According to an analysis made by the Melbourne Energy Institute, the cause of South Australia’s recent drastic spike in electricity prices is energy companies trying to play the system. The report states that energy companies have been using their market power to charge ‘monopoly rents’.

The report states that these companies could have withheld electricity as a strategic move in 2015, which have caused these immense spikes in prices. The analysis also allows the Energy Institute to make the assumption that the “energy-crisis” in South Australia was due to the lack of competition in the area’s energy market.

The renewable energy industry in South Australia has received a huge amount of criticism from the public and many have blamed the industry for the latest price spikes, saying that relying solely on Renewable energy for its energy industry would be ‘foolish’.

The detailed report also revealed that fossil fuel generators were implementing “economic withholding”, where they have charged drastically more for the supply of their energy. They are able to do this because of their huge power in the energy market.

“We only looked at AGL because it was the largest – but it’s quite likely that other generators are doing this too,” said McDonnell.

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