Finance guru Mark Bouris exposes major problem with Australia - and youre paying the price
Australian businessman Mark Bouris has hit out at the latest energy price rise, calling the current situation outrageous.
Australian businessman Mark Bouris has hit out at the latest energy price rise, calling the current situation outrageous.
His comments come as hundreds of thousands of households face higher power bills as the The Australian Energy Regulator (AER) resets benchmark prices higher.
Safety net prices differ by region but residential electricity customers from NSW, South Australia and southeast Queensland are on track for price rises of somewhere between 2.5 and 8.9 per cent compared with the last financial year.
Inflation-adjusted annual price increases of between $60 and $140 can be anticipated, depending on the area.
Bouris expressed his frustration over the hikes, particularly given Australias role as a major energy exporter.
Households brace for power price hikes while Australias a major energy exporter.
Gas and coal flood overseas, yet bills soar here. Its outrageous for everyone, especially those doing it tough.
Why are energy prices rising?
Leading buinessman Mark Bouris has hit out at the latest power bill rise
Average wholesale market spot prices increased across 2024, driven by high demand, coal generator and network outages, and low solar and wind output that caused high price events in the relevant states, the AER said.
But critics argue that Australia exports too much of its gas, leaving insufficient supply for domestic consumers.
Gas significantly influences electricity prices in Australia because it can be quickly activated to fill any gaps in electricity supply, unlike coal, which takes longer to ramp up or down.
When theres a sudden demand for electricity or a supply shortage, gas-fired power plants can be turned on instantly to keep things stable.
But the price of gas on the east coast has trebled in the past 10 years because three gas export associations were given permission to export LNG without provisions to ensure enough was kept for Australian users.
According to the Institute for Energy Economics and Financial Analysis (IEEFA), these exporters have been draining the domestic gas market to take advantage of higher prices overseas.
In recent years, Australian LNG exporters have continued to export gas beyond that required to meet their long-term contracts … to take advantage of high prices, IEEFA researcher Joshua Runciman told the ABC.
There have been calls for Energy Minister Chris Bowen to be sacked over soaring power bills
Queensland LNG exporters have collectively shifted from being net contributors of gas into the domestic market to net withdrawers, thereby worsening the supply/demand outlook.
Mr Runciman said the majority of east coast gas was exported to international markets at the expense of domestic gas users, pushing up prices and slowing down consumption.
The impact on consumers
Australia only has around two per cent of the worlds known gas reserves but that more than meets local demand with 80 per cent of the resource going to nations such as Japan and Korea.
Meanwhile, Australians are slugged more than twice the price for gas than Americans, despite both countries being exporters of the energy source.
Other gas-producing regions such as the Middle East or Indonesia, ensure their citizens get cheap energy.
If we take the Middle East as a whole, its all state-controlled, Energy Economics and Financial Analysis expert Kevin Morrison told Daily Mail Australia.
The locals feel that oil and gas is a natural right. Its all subsidised, so they pay next to nothing.
Around 80 per cent of the natural gas produced in Australia is liquefied for expert to Asian countries (pictured Origin Energys Australia Pacific liquefied natural gas facility at Curtis Island in north Queensland)
Government response and future outlook
The Australian Energy Market Operator (AEMO) has long predicted gas shortfalls for southern states yet lower projected demand has helped it push out that timeline until 2028, three years later than forecast.
The Eraring coal station staying open longer than expected following its delayed retirement should further lower demand for gas power generation, the market operator said in its report on Thursday.
The report comes as the government inked a deal with Australia Pacific LNG to secure more gas for the domestic market.
AEMO chief executive officer Daniel Westerman said investment in new supply was necessary as gas fields in the Bass Strait were depleting.
Under the Labor governments deal with APLNG, commercial and industrial gas consumers would have first preference for the new supply of up to 40PJ of gas.
That gas would be covered by the governments code of conduct that dictates new supply will be offered at $12 a GJ.
Energy and climate change minister Chris Bowen said the gas code had successfully secured affordable gas for local businesses and took aim at the oppositions energy policy.
Unlike coal or nuclear, gas power generators can be turned on and off in a couple of minutes, he said.
And when its off, its zero emissions.
But Liberal leader Peter Dutton called for Mr Bowen to be sacked over the rising power prices.
Its time for Chris Bowen to be sacked and I think the Prime Minister should accept that Chris Bowen has been a total failure as the Energy Minister in this country.
Chris Bowen and Anthony Albanese have presided over a broken promise of a $275 electricity cut which was made on 97 occasions before the election and now power bills have gone up by $1300.