Households can expect to pay around $77 less (or 6 per cent) for electricity in 2024 than they do now, as cheaper renewable energy drives down prices to their lowest levels since 2017.
The Australian Energy Market Commission's 2021 annual residential electricity price trends report examined the direction household electricity prices will take over the next three years.
It found that lower wholesale costs, and reduced environmental costs in most regions, were continuing to drive overall prices down.
AEMC Chairwoman Anna Collyer said the report showed that, based on current trends, prices per kilowatt hour were likely to be under 26c p/kwh hour by June 2024, the first time since 2016/17.
"This illustrates how integrating renewables in a smart way makes it possible to have both lower emissions and lower costs for consumers," Ms Collyer said.
"We can now see far enough into the future to be confident that power prices paid by consumers will continue to trend downwards over the next three years, despite the staged exit of Liddell power station in 2022 and 2023, one of the biggest coal-fired generators in the national electricity market.
"But while wholesale costs and environmental costs are trending lower, we are starting to see increases in the cost of network investments, and this is likely to accelerate over the next decade as more network investment is required to connect dispersed new generation to the grid.
"There are also regional differences across states and territories that will affect price outcomes. And what energy offer you have, how much you use and whether you also have solar or gas will also affect your bill."
The Federal Government's $600 million gas-fired peaking station at Kurri Kurri is designed to keep downward pressure on prices following the closure of Liddell.
Construction is due to start in the new year, pending approval from the NSW Department of Planning.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said the AEMC results were good news for households.
"Further falls in electricity prices will put more money in the hip pockets of families and households, critical as we recover from the impact of COVID," Minister Taylor said.
"Importantly this report shows that the government's support for new on-demand dispatchable generation, like Snowy 2.0 and the Hunter Power Project gas generator at Kurri Kurri, will put downward pressure on prices as aging thermal generation retires.
"Consumers are at the centre of our approach to energy. Our actions have supported a 10 per cent drop in household electricity costs under this Government - that's 11 quarters in a row of falls in year-on-year household electricity costs across the country.
"Labor's record is a doubling of household electricity costs, which rose every single quarter, 23 quarters in a row.
"The Morrison Government will continue to take the necessary steps to safeguard the delivery of affordable and reliable power, and ensure Australian households and businesses get a fair deal on energy."
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