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Impact on electricity prices

Impact on electricity prices

In addition to assessing progress towards the target, we are required to report on the impact of the Large-scale Renewable Energy Target on electricity prices in our 2016 annual statement.

Three key factors influence electricity prices:

  • wholesale and retail electricity costs
  • network charges, and
  • environmental policies (Large-scale Renewable Energy Target, Small-scale Renewable Energy Scheme, feed-in tariffs and state-based schemes).

As shown in table 8, the Large-scale Renewable Energy Target accounted for an estimated 2.8 per cent (or an average $9.38 per quarter) of the average household electricity bill in 2016. This is an increase of $2.25 per quarter from 2015. This increase is consistent with the trajectory towards the 2020 target.

Table 8: Impact on electricity prices in 2015 and 2016
Percentage of electricity prices accounted for by
the Large‑scale Renewable Energy Target
Average cost per quarter in average household electricity bill
20151.9 per cent$7.13
20162.8 per cent$9.38

Source: Australian Energy Market Commission 2016 Residential Electricity Price Trends

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