Power prices set to rise in 2017 after Hazelwood closure

Hazelwood will officially close at the end of March.

Hazelwood will officially close at the end of March. Photo: AAP

The closure of Victoria’s Hazelwood coal-fired power station will add $78 a year to energy bills around the country, a new analysis shows.

South Australians will be hit the hardest, with $150 a year set to be added onto household bills.

Victorians will get an extra $99, while Queenslanders will face an extra $28, thanks to the upcoming closure of Australia’s cheapest power generator.

The Australian Energy Market Commission 2016 residential electricity price trends report found wholesale energy prices will jump 36 per cent thanks to Hazelwood’s March shutdown.

“Across the national electricity market the generation mix is changing — with the large-scale renewable energy target leading to substantial investment in wind generation,” commission chairman John Pierce said on Tuesday.

“This is contributing to the closure of coal-fired plants and increasing wholesale and retail prices.”

Federal Energy Minister Josh Frydenberg said the Government was trying to keep prices down while maintaining energy security

“The report shows that the closure of Hazelwood alone, which supplies around 4 per cent of the National Electricity Market, will on average drive up power prices by $78 across the country.”
Federal Energy Minister Josh Frydenberg

“Victorians will be hard hit by the closure of Hazelwood as it will drive up electricity prices by $99 and in South Australia it will add $150 to the typical household bill.

“Queenslanders are not exempt either with the closure adding about $28 to their electricity costs.”

Mr Frydenberg said an increase in coal royalties in Victoria and an increased renewable-energy target had forced Hazelwood’s French owners, Engie, to shut the plant down.

In November, Engie Australia chief executive Alex Keisser said the 50-year-old Hazelwood was “no longer economic to operate”.

“Engie in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation,” Mr Kesser said at the time.

“Given current and forecast market conditions, that level of investment cannot be justified.”

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