Renee Coffey (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy. What will today's default market offer mean for power prices? What policies are reducing the cost of power, and what policies would make power more expensive?

Chris Bowen (McMahon, Australian Labor Party, Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I thank my honourable friend for the question. As the honourable member indicates, today is the day where the default market offer final determination is released. It's a matter of law that it must go out today unless the minister intervenes and changes the law—something I have not done but something one of my predecessors has done on previous occasions. But there was no need for that today, because, on that occasion, a minister hid a 20 per cent price rise; today, we have price reductions in every jurisdiction in Australia covered by the default market offer.

For the honourable member for Griffith, in the Energex jurisdiction, there's a 10.7 per cent reduction for residences and a 14 per cent reduction for small business. In rural New South Wales, the area covered by Essential Energy—the members for Eden-Monaro and Richmond are very pleased about this, but I think all honourable members should be—there's a small-business reduction of up to 20.9 per cent in their energy bills.

Now, the member asks me what has led to this. There are, really, three reasons. It's no coincidence that, at the time we've hit 50 per cent renewables in our grid, we are seeing energy prices come down. That's the first thing. Secondly, we're seeing more of that cheap renewable energy during the day stored for night-time, when prices go up, because what we see is coal and gas setting the price at night-time, which drives prices up. Batteries are now setting the price 30 per cent of the time, compared to 18 per cent of the time just 12 months ago. The Energy Regulator said today, for example, the cheaper home battery policy is 'certainly making the system cheaper'. When we get cheaper home batteries in, it reduces the bills for those households and it reduces the bills for everybody. Indeed the Energy Regulator has also said these reductions have 'really been driven by a big surge in batteries and solar into the system, which is displacing the need for more expensive gas fired generation and hydro generation at peak times'. This is what is working. In addition, the Albanese government's reforms to the default market offer to strip out costs from energy companies and not allow them to claim them in the default market offer is making a difference.

The honourable member asked me what makes a difference. Well, what makes a difference is 414,396 cheaper home batteries that have now been installed under the Albanese government. That's 414,000 batteries reducing prices for those households but also reducing prices for everyone. What would not help is 22 failed energy policies. What would not help is sweating unreliable and expensive coal for longer. What would not help is $600 billion on a nuclear fantasy. They are all things that will not help. What is helping is cheaper renewable energy backed by batteries.