Victoria continues to outshine other Australian states with the lowest electricity prices, driven by its robust renewable energy generation. The latest AEMO report highlights how Victoria’s focus on renewables is not only promoting sustainable energy but also significantly reducing electricity costs for consumers.
According to the latest data from the Australian Energy Market Operator (AEMO), Victoria boasts the lowest wholesale electricity prices in the country, a trend that underscores the state’s commitment to renewable energy. As of the end of 2024, Victoria’s average wholesale price was just $45 per megawatt hour — nearly half the national average of $88/MWh. This price advantage is primarily attributed to the state’s substantial investment in renewable energy sources like solar and wind.
Impact of Renewable Energy on Prices
The shift towards renewables is having a profound impact across the National Electricity Market (NEM), particularly in states like Victoria, South Australia, and Tasmania, which all enjoy high renewable energy generation. In contrast, regions still reliant on coal, such as NSW and Queensland, have seen prices climb to $143 and $127/MWh respectively. The dependency on coal, which is both costlier and less reliable, starkly contrasts with the cheaper and more sustainable energy solutions adopted in the south.
Record Growth in Solar Generation
The surge in solar energy capacity has been a critical factor in meeting growing electricity demands while suppressing prices. Over the last quarter, renewable energy sources contributed to a record 46% of total electricity generation across the NEM, with coal generation dipping below 50% for the first time. This significant increase in renewable supply can lead to periods of zero or even negative pricing, further driving down average costs due to the ‘merit order effect’. This effect occurs when cheaper renewable energy displaces more expensive fossil fuels in the energy mix.
Long-term Savings and Market Stability
The increasing share of renewables not only provides immediate cost benefits but also ensures long-term savings and price stability. Projections from the Australian Energy Market Commission (AEMC) suggest that Victoria’s electricity prices will continue to decrease, potentially falling by 9% over the coming decade. This trend is supported by the growing rate of electrification, which is expected to exert downward pressure on household energy costs.
What Does This Mean for Consumers?
For Victorian residents and businesses, the shift towards renewables has translated into substantial savings. In 2024, the Victorian Default Offer (VDO), which benchmarks retail electricity prices, was reduced by 7% from the previous year, saving typical households and businesses around $100 and $260, respectively. When compared to other states, Victoria’s VDO is on average over $300 less than those in NSW, QLD, and SA.
Competitive Advantage for Industries
For the industrial sector, Victoria’s low wholesale prices provide a competitive edge by lowering operational costs. This not only enhances business competitiveness but also promotes sustainability.
Looking Ahead
The key to maintaining and further reducing electricity costs lies in the continuous and timely expansion of renewable projects. Policy and regulatory reforms will also play a crucial role in sustaining this momentum.
Compare and Switch Now
Given these developments, now is an excellent time for consumers to review their current electricity plans. By comparing options, you can ensure you are on the most cost-effective plan available. With Victoria leading the way in affordable energy, checking if you’re on the cheapest plan could lead to significant savings.
Compare Electricity Plans Now – Don’t miss out on the opportunity to save by switching to a cheaper, more sustainable energy plan in Victoria.