Explainer: Why have prices skyrocketed? What does the weather have to do with it? And is there anything that can be done? | joshgordo
The spike in gas prices has been variously described as “apocalyptic” and “a perfect storm”.
There have also been domestic forces at work. Australia’s ageing fleet of coal-fired power plants has been plagued by unplanned outages. This has cut the supply of electricity to the energy grid, adding to the pressure placed on gas, which can be cranked up at short notice as an alternative source of electricity generation.
Weather has also played a big part. Floods in Queensland and NSW affected coal supplies. And a recent cold snap has further fuelled demand for gas to warm homes, sending prices even higher. But under the current rules, the export control could not be used until January 1 at the earliest, to give time to consider whether there will be a shortfall – and only if there was a shortage of gas.
The government also remains deeply reluctant to pull the export control trigger, out of fear it could jeopardise Australia’s reputation as a reliable international exporter, particularly when other countries are bearing the cost of sanctions imposed on Russia.That depends on a range of factors, such as the performance of coal-fired generators and the amount of wind and solar power being generated over the winter, EnergyQuest chief executive Graeme Bethune said.
Driving cars on Sundays was banned in some European countries during the 1973 oil crisis, prompting a boost in alternative modes of transport.You can get a sense of where power prices might be heading from a, which sets basic “default” power bill price increases in NSW, south-east Queensland and South Australia. It said that from July 1, basic electricity bills for households would be allowed to increase by as much as 8.2 per cent above inflation.
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