Energy in Australia
Energy-in-Australia-2015
Energy-in-Australia-2015
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Figure 4.5: <strong>Australia</strong>n electricity consumption, by region, 2013–14<br />
250<br />
200<br />
150<br />
TWh<br />
100<br />
50<br />
0<br />
1993–94 1998–99 2003–04 2008–09 2013–14<br />
States <strong>in</strong> the NEM Western <strong>Australia</strong> Northern Territory<br />
Notes: New South Wales <strong>in</strong>cludes the <strong>Australia</strong>n Capital Territory<br />
Source: Department of Industry and Science (2015) <strong>Australia</strong>n <strong>Energy</strong> Statistics, Table L<br />
Electricity prices<br />
There are notable differences <strong>in</strong> the wholesale energy purchase costs<br />
across states <strong>in</strong> the NEM which partly reflect actual differences <strong>in</strong> wholesale<br />
prices faced by retailers <strong>in</strong> each state as network capacity constra<strong>in</strong>ts limit<br />
the amount of electricity transmitted across state borders.<br />
The cost of purchas<strong>in</strong>g energy rose sharply between 2006 and 2009, as<br />
droughts produced relatively dry conditions which limited hydro-electric<br />
generation and the availability of water resources for cool<strong>in</strong>g <strong>in</strong> the<br />
operation of thermal generation plants. The effect of the carbon pric<strong>in</strong>g<br />
mechanism contributed to higher dispatch prices <strong>in</strong> 2012–13 and 2013–<br />
14, but there is, overall, a decl<strong>in</strong><strong>in</strong>g trend <strong>in</strong> wholesale prices, reflect<strong>in</strong>g<br />
weak demand and the oversupply of electricity generation <strong>in</strong> the NEM.<br />
The ma<strong>in</strong> factors that determ<strong>in</strong>e retail electricity prices are wholesale<br />
prices, transport prices (transmission and distribution), retail costs, and<br />
environmental policies.<br />
48 ENERGY IN AUSTRALIA 2015