As expected, pricing is currently very high due to the Summer Demand conditions. This has been exacerbated materially due to the impact of bushfires with the interconnect between NSW and VIC disconnected due to damage, and major damage to the Transmission Network impacting the ability to deliver power from Generators such as Snowy Hydro. These are not expected to be long-term impacts and pricing should ease as demand decreases through February and March.
Because of the usual high demand during Summer, some Network Operators implement peak demand pricing as an incentive to reduce demand during these high demand days. We have seen peak demand pricing applied on occasions during December and expect more during January. Note that not all Network Operators apply Peak Demand pricing. These additional charges are a penalty based incentive for consumers to reduce demand in high consumption areas such as HVAC.
The Australian Energy Market Commission’s annual report on electricity price trends shows an overall falling price outlook over the next few years, this is encouraging and is consistent with our pricing outlook.
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