What Is The Electricity Cost Per kWh in Australia?

Are Electricity Prices High in Australia?

Electricity prices vary widely worldwide and sometimes within the same country, depending on infrastructure, geography, and politically determined taxes and levies. For example, in Denmark, Belgium and Sweden, taxes comprise a large portion of residential end-user electricity prices.

The cost of living in Australia has never been cheap, but rising electricity prices are still a concern for many. Electricity bills have increased 63% above inflation over the past decade, and by 2023, Australian electricity prices are set to rise by a quarter or more.

The electricity prices in the NEM, which provides electricity to around 89% of the Australian population, have more than doubled in 12 months, according to the Australian Energy Market Operator's (AEMO) latest Quarterly Energy Update report.

In Australia, about 90% of customers are on electricity plans, often discounted from the default market offer. So, if the price of the core market supply goes up, will the cost of your electricity plan?

Countries such as Iran, Qatar and Russia enjoy some of the most economical electricity prices in the world due to their extensive oil and natural gas production. However, countries that rely heavily on fossil fuel imports for power generation are more vulnerable to market price fluctuations.

Australia has more than enough natural gas to provide affordable electricity to homes and businesses but exports about six times as much as homes use. Australia is the world's largest gas exporter, with 80% of Australian gas exported. Gas companies try shipping as much gas overseas as possible to maximise profits.

Gas companies have charged Australian businesses and households the same high international prices throughout 2022. As a result, profits for many large gas companies have tripled over the past year, with little increase in production.

(Data Source: Statista. Published by Statista Research Department, Jun 28, 2024)

What Is the Electricity Cost Per kWh in Australia?

Electricity prices are rising around the world, and Australia is no exception. The cost of electricity per kilowatt-hour in Australia varies wildly, depending on where you live and your electricity supplier. Generally speaking, the average cost of electricity per kWh in Australia is between 20 and 45 cents per kilowatt-hour.

A daily usage fee must be paid except for electricity; the daily usage fee is about 70 to 120 cents per day, no matter how much electricity you use.

New South Wales

New South Wales' electricity comes from various sources, including coal, gas and renewable energy, which promotes competition in the electricity market. New South Wales' energy policy is designed to support renewable energy based on affordability and availability. New South Wales electricity prices are expected to rise in 2024, but competition between suppliers has given consumers more choice.

The table below shows information on electricity prices for some of the top electricity suppliers in New South Wales.

Victoria

Victoria's electricity market is competitive, and various discounts and offers can significantly impact electricity and electricity bills. Many electricity suppliers in Victoria include AusNet Services, Citipower, Jemena, Powercor and United Energy. These suppliers' average electricity prices range from 26.7c to 35.8c per kWh. The Victorian Government encourages residents to compare options to decide which electricity plan suits their home. Victoria has one of Australia's lowest average electricity prices, with an electricity price of 28.45c per kWh.

The table below shows information on electricity prices from some electricity suppliers in Victoria.

Queensland

Electricity prices vary between electricity retailers in Queensland. The price of electricity in Queensland is influenced by many factors, including the cost of generating, transporting and distributing electricity. Its price can vary depending on location, electricity suppliers and usage patterns. As a regulated market, electricity suppliers can set their electricity prices, resulting in a price difference for consumers.

The table below shows information on electricity prices from some Queensland electricity suppliers.

South Australia

Many factors affect the cost of electricity in South Australia, including generation, transmission and distribution costs. ESCOSA sets the maximum price electricity suppliers can charge. Suppliers must obtain authorisation from ESCOSA to change prices so consumers do not overpay. Comparing rates from different suppliers is essential when looking for the cheapest kWh price in South Australia.

The table below is some information on the cheapest kWh prices in South Australia.

Western Australia

Electricity prices for homes, small businesses, and some large corporations in Western Australia are regulated by the government. This means that government agencies, not electricity suppliers, set electricity prices. The government has maintained a uniform electricity price policy for many years, meaning electricity prices are the same across the state.

The size of Western Australia affects the cost of electricity distribution, transportation, and supply, so most customers have limited choices of electricity suppliers.

Tasmania

Tasmania used to be one of the most regulated electricity markets in Australia. Although electricity retail competition has been deregulated, electricity prices remain government-regulated. So, state retailers need more room to change prices based on tariffs alone. As a result, most electricity suppliers in Tasmania rely on discounts, incentives, or unique offers to beat their competition.

Above is an overview of the price of electricity per kWh in each Australian state. Notably, these rates are based on the distribution schedule and may vary between electricity suppliers in the same state. Electricity suppliers also have a role in determining electricity prices, as they add their costs to providing electricity services to consumers. Therefore, rates may vary. The data mentioned above is for reference only.

Will The Electricity Cost Per kWh Affect Your Electricity Bill? 

Australia's electricity market combines state and private ownership. The National Electricity Market (NEM) spans eastern and southern states and promotes competition between generators and retailers. However, this competitive market structure means that prices will remain the same. Privatisation has inherent risks, the most obvious of which is the profit drive.

Electricity charges are usually charged per unit. Your electricity bill will show a list of your household monthly electricity consumption in kilowatt-hours (kWh). Electricity costs are divided into two categories: supply charges and usage charges.

• Supply Charges: Supply charges are uncontrollable and are daily charges set by your network distributor, depending on your area.
• Usage Charges: Your usage charges will vary depending on the price per kilowatt-hour in your electricity bill and your average daily electricity usage. Finding the best electricity tariff for your needs can significantly reduce your usage charges.

Generally, the electricity price is determined by the pricing structure of your chosen electricity plan. The most common types of electricity suppliers offer are flat and time-of-use rates.

As you can see above, the price per kWh is only part of the cost of electricity. However, the cost per kWh varies depending on where you live in Australia and your chosen electricity supplier. Each electricity supplier has a different pricing structure, meaning your electricity bills may vary depending on your daily electricity consumption and selected electricity plan.

What Determines Electricity Prices in Australia?

Regarding the actual situation of electricity prices in Australia, the following factors will affect the change in electricity prices:

Generation Costs

Australia's energy system relies heavily on expensive fossil fuels. Although the country's energy use, including solar and wind power, is increasing, most of its electricity comes from coal and wind power plants. Globally, coal and gas prices continue to rise due to fuel shortages.

The average wholesale gas has risen more than fourfold from about $6 in 2020-21, pushing up the operating costs of gas-fired power stations and, in turn, electricity prices. Coal prices are $75 per tonne in 2021 but rise to $370 per tonne in 2022. As with gas, this will impose flow-through costs on coal-fired power stations, raising electricity prices.

As long as Australia's energy system continues to rely on fossil fuels bought and sold as international commodities, it will continue to be at risk of sudden and unexpected surges in electricity prices.

Electricity Delivery Costs

Most people don't think about the expense of delivering electricity, but it accounts for 40% of a home's energy bill. It costs about twice as much to provide electricity to your home as it does to use it.

Costs Delivering electricity requires infrastructure such as poles and wires, a service electricity suppliers provide. The cost of delivering electricity has driven a further 25% increase in electricity prices since 2007.

Aging Infrastructure

The country's aging infrastructure is a significant factor driving Australia's electricity costs. The coal-fired generators that supply most of Australia's electricity are now obsolete. The oldest power station is Liddel Power Station, which is more than 50 years old in the Hunter region of New South Wales.

Australia's electricity infrastructure, including power stations, transmission lines and distribution networks, requires significant investment to maintain reliability and meet growing demand. The costs of upgrading and maintaining this infrastructure are transferred to consumers, resulting in higher electricity prices.

Climate and Environmental Policies

After the fires and droughts, Australia is committed to reducing carbon emissions and implementing climate and environmental policies. For example, the Renewable Energy Target (RET) aims for 33,000,000 MWh of Australia's electricity to come from renewable energy by 2023. These policies will help expand renewable energy but will affect electricity prices due to legal compliance costs and with the financing.

How Do I Find the Best kWh Price for Electricity?

How can you find the correct electricity cost per kWh? When choosing the best electricity price per kWh, it is essential to consider several factors. When looking for the best electricity price per kWh, you should weigh rates, discounts, benefits, and additional contract terms. Choosing an electricity supplier that puts customer satisfaction first is also beneficial.

If your electricity bills are high, you can compare the price of electricity per kWh from different electricity suppliers in your area. There may be fewer electricity providers to choose from in remote areas.

In addition to comparing the cost of electricity per kWh from different electricity suppliers, you should also pay attention to the following:

• Discounts and other benefits (Does the supplier offer sign-up offers or additional benefits as part of a loyalty program.)
• Customer service and features (Consider extensive online reviews, customer support options, and whether there is an app to manage your plan.)
• Solar feed-in tariff

If you have enough panels and backup batteries to power your home, you can gain electrical independence and possibly even go off the grid. If you don't have a sufficient budget to install a solar system in your home, you can try a solar generator instead.

Solar generators have many benefits and are powerful enough to charge your appliances. Here, we introduce Jackery Solar Generator, which combines Jackery Solar Panels with a Portable Power Station to efficiently turn and store energy.

Jackery Solar Generators Explained

A solar energy system can help offset rising electricity costs per kWh, making it a worthwhile investment. To introduce sustainable energy into your home, Jackery, a pioneer in solar products, provides robust solutions like the Jackery Solar Generator 2000 Plus and the Jackery Solar Generator 1000 Pro.

With its reliable energy source and ample power storage for high-demand equipment, the Jackery Solar Generator 2000 Plus reduces reliance on costly grid electricity. Likewise, the Jackery Solar Generator 1000 Pro is ideal for moderate energy since it offers a reliable power source that reduces electricity costs. 

With both models' energy storage options, you can catch and store solar energy during the hours of the greatest sunlight and use it later when the cost of grid electricity is higher. This feature optimises energy cost savings and guarantees a steady power supply. 

Jackery Solar Generator 2000 Plus

The Jackery Solar Generator 2000 Plus provides a workable way to reduce power expenditures due to rising electricity prices per kWh. Because of its remarkable capacity and high output, this generator is a wise investment for lowering dependency on conventional energy sources.

• Expandable Capacity to Meet Power Needs: Starting at a solid 2 kWh, the Solar Generator 2000 Plus can be expanded to a remarkable 12 kWhby adding extra battery packs. This flexible power supply supports large and energy-intensive appliances, covering more of your home's energy needs and helping you avoid high per-kWh costs.
• LiFePO4 Long-Lasting Battery with Safety at Its Heart: The Explorer 2000 Plus is made with a LiFePO4 battery intended to last more than ten years. It's a dependable option with over 4,000 charge cycles for people who value longevity. The incorporated ChargeShield technology provides complete safety safeguards, guaranteeing steady and safe power transmission without endangering your gadgets.
• Efficient and Environmentally-Friendly Power: The Solar Generator 2000 Plus provides clean energy without noise or emissions. Its quiet operation and easy solar charging options make it ideal for indoor and outdoor use, allowing you to lower energy costs eco-consciously.

Jackery Solar Generator 1000 Pro

The Jackery Solar Generator 1000 Pro offers a robust, portable substitute for individuals seeking to reduce energy expenses without requiring more extensive installations. It gives consumers performance and dependability in a more compact size, enabling them to reduce their electricity costs successfully.  

• Strong, Compact, and Ready for Regular Use: The Jackery Solar Generator 1000 Pro is made to meet basic energy requirements. It has a 1002Whcapacity and a 1000W output with a max of 2000W. It's a flexible option that may be used regularly or as a backup in an emergency because it supplies the energy needed to run gadgets like phones, computers, small appliances, and more. Anywhere you need a dependable energy source, whether indoors or out, its lightweight, foldable solar panels make it a practical choice.
• Fast Charging Options: The Explorer 1000 Pro's rapid solar charging capabilities can fully recharge the unit in just 8 hourswhen connected to compatible solar panels, helping you quickly store energy and offset costs. Additionally, it supports wall and car charging for versatile, convenient use. The advanced MPPT technology enhances solar charging efficiency, ensuring you capture maximum power from the sun to store as cost-saving energy.
• Longer Lifespan: Regardless of weekly usage, the battery's maximum capacity will remain at 80%after a decade of utilisation. Exceptional battery standby exceeding 365 days at 80% capacity establishes an industry benchmark, rendering it optimal for emergency backup power.

The streamlined efficiency of the 1000 Pro and the scalable power of the Jackery Solar Generator 2000 Plus gives you control over your electricity bills per kWh. It provides sustainable power solutions that lower prices and dependency on the grid.

Electricity Cost Per kWh FAQs

The following are the frequently asked questions about the electricity cost per kWh in Australia.

1. How often do electricity prices change in Australia?

Generally speaking, electricity prices in Australia change once a year. Every year on Jul 1, the Australian Energy Regulator (AER) and other state regulators set new reference prices or electricity price orders to determine the maximum energy price they consider "fair" for consumers. Most electricity suppliers change prices around the same time, usually after Jul 1. However, some may stagger their changes between July and September.

2. Why do some states have higher electricity prices in Australia?

Your electricity price depends on your location and the electricity supplier in your area. Electricity suppliers pay the grid's costs, including maintaining, repairing and upgrading poles, cables and other infrastructure, which can increase the final price. The local electricity price in your area also depends on whether cheaper renewable energy, such as wind and solar, can help offset some of the higher costs of using coal and gas.

For example, South Australia relies heavily on expensive natural gas while relying on wind power for electricity generation. Therefore, electricity prices in South Australia are higher than in other parts of Australia. However, the South Australian government and electricity suppliers are offering rebates to consumers to help offset the effects of rising electricity prices.

3. Do electricity supply costs affect electricity prices?

Electricity prices in Australia have increased by 63% in the last ten years. One of the main reasons is the rising costs of electricity supply. In some areas, the cost of supplying electricity is double that of the electricity itself.

Except for South Australia, where power generation costs are higher, electricity supply costs account for the most significant proportion of electricity bills in all states. Because poles and wires are a multi-billion dollar network upgrade, it is expensive to transport them to stores in New South Wales and Queensland. To better understand whether electricity supply costs affect electricity prices.

Then realise that electricity costs are mainly made up of three parts, including:

- Generation costs (39% of electricity costs)

- Transportation costs (53% of electricity costs)

- The cost of environmental policies (8% of electricity costs)

Final Thoughts

The cost of electricity is a significant concern for homes and businesses because it is essential to our daily lives. Electricity prices vary between Australian states. This article explains the cost of electricity per kWh in each Australian state and why these differences occur. Whether you want to budget your monthly bills or spend less, knowing the cost of electricity per kWh in each Australian state can help you make informed decisions about your electricity use. Greater awareness is the first step in reducing electricity costs.