What you need to know about the 'energy crisis'
Rising power prices are top of mind for most Australians, so we wanted to take a moment to tell you what's causing the volatility, and how our team is best placed to help.
Australia is experiencing an unprecedented shift in the energy market, and a complex range of factors are at play.
Energy stocks that dwindled during Covid-19 lockdowns were unable to cope with rising demand once restrictions eased, driving up prices. The early cold snap, which saw Aussies race to turn on their heaters to beat the winter chill, has caused additional strain.
Meanwhile, sanctions placed on Russia- one of the world's largest energy exporters - following its invasion of Ukraine have severely impacted the global supply of gas, oil, and coal. And our own local energy production has suffered the double-whammy of outages at 30% of our coal-fired power plants and floods further hampering coal supplies.
Australian Energy Market Operator (AEMO) Intervention
In response to rising wholesale prices, the Australian Energy Market Operator (AEMO) stepped in earlier this month to impose a price cap. Because of this, some generators were making a loss and began withholding power from the grid, triggering blackout warnings.
The AEMO compelled generators to continue producing electricity with promises of compensation. Then, to further shore up reliable electricity supply, it suspended the spot market so that power is now being sold at a fixed price rather than a changeable rate.
How have energy suppliers been affected?
The current market climate has had a major impact on energy suppliers as they grapple with growing price uncertainty.
Some smaller suppliers are turning customers away, while a handful, including Pooled Energy and Weston Energy, have gone out of business.
Fortunately, as energy is an essential service, there are safeguards in place to protect consumers. Those holding an account with a supplier that has gone out of business will be transitioned to another provider for their energy supply.
How can we help you, help your clients?
Due to market volatility, it's critical that consumers are given transparency around pricing from a range of providers, helping them make an informed decision when connecting their utilities. At compare & connect, we are proud to have been delivering this to your customers for some time now, via our many supplier partnerships and easy to use online connection platform. Due to the current unprecedented circumstances, the number of energy providers available, and therefore products available, has been diluted. With this said, compare & connect is still offering the broadest panel of suppliers and products in the utility connections space.
As with every crisis, there is opportunity and for our real estate partners, being able to promote a partnership with the industry's leading choice provider, avails an opportunity to be of even greater service to your clients in their time of need. When assisting your clients in finding a new home, ensure our service is warmly introduced as a way for them to simplify their search for a great energy deal.