New analysis from the Institute for Energy Economics and Financial Analysis (IEEFA), released today, sheds light on the real reasons behind the price hikes, with gas identified as the main driver.

According to IEEFA, any spike in gas costs leads to higher electricity prices, while frequent outages at aging coal-fired power stations further contribute to rising wholesale prices.

Lead analyst Johanna Bowyer said when coal power stations have outages, which occur more often as they age, expensive gas-powered generation fills the gap.

“Our analysis of historical trends shows that continued dependence on expensive gas power stations and ageing coal-fired power stations for electricity generation has been driving up wholesale prices, while more renewable energy has been bringing them down,” Bowyer said.

Another factor contributing to higher bills is the rise in network costs over the past few years.

Bowyer explained these costs could be lowered by addressing electricity network supernormal profits and reducing peak demand, which could be achieved through the use of smart air conditioners.

“Network costs, which have risen recently, could be reduced by around $120 per year by addressing electricity network supernormal profits,” she said.

“Consumer-owned energy technologies that reduce the maximum power demand in the network, like batteries, flexible hot water heating and smart air conditioners, could reduce network upgrade requirements to put downward pressure on network costs.”

Households and businesses can also save money by upgrading to more efficient appliances, and installing rooftop solar and battery storage.

“With the right support, households and businesses can also significantly reduce their electricity use, and therefore save on their bills, through upgrades that improve the energy efficiency of their appliances and buildings, and through installing rooftop solar and storage,” Bowyer said.