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.
What is Spot Market Suspension?
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 retailers been affected?
The current market climate has had a major impact on energy providers as they grapple with growing price uncertainty.
Some smaller retailers are not onboarding new customers, while others, such as ReAmped, are turning customers away. A handful, including Pooled Energy and Weston Energy in NSW, have gone out of business.
Fortunately, as energy is an essential service, there are safeguards in place to protect consumers, and your account will be purchased by another retailer.
How can we help?
Because of the volatility of the current market, it’s vital you compare your options.
At compare & connect, we pride ourselves on the breadth of our panel of energy retailers which has enabled us to assist our customers achieve savings on their energy bills over the years, however, due to the current unprecedented circumstances, the number of energy providers and the products we are able to offer is restricted, as is the case with most of our competitors and at this stage, we may not be able to offer you a better product than the one you are already on.
As with every crisis, this one shall pass too and we will soon be able to offer a wider range of products. In case we are unable to help you save on your bills this time, please keep reviewing our product offering regularly, as they constantly change.
To find out more visit our website here.