A Complete Guide to Decode Cheap Energy Plans
Australia’s electricity market is divided into the east coast and west coast. These two regions have wholesale energy markets where retailers buy the power they sell to generators.
Australia has five east coast states: New South Wales, Victoria, Queensland, Tasmania, and the ACT. On the other hand, there are four states on the west coast: Western Australia, South Australia, Northern Territory, and Queensland (the largest state).
Generally speaking, NSW and Victoria have the most expensive electricity as they rely more on hydroelectricity as their primary source of power generation. In contrast, Queensland has a mix of coal and natural gas and has access to cheap power. SA is mainly reliant on natural gas due to its ample supply of this resource.
Understanding Australia’s Electricity Market
The National Energy Market (NEM) is the wholesale market that distributes electricity to retailers who provide it to end-users like households and businesses. The NEM covers more than 90% of Australia’s population across the east coast.
On top of that, there are both state-based energy markets and federal energy market schemes in the different parts of the country.
Market Price Plans
Market Price Plans are the standard plans that most retailers offer to their customers. The price charged is determined by the wholesale electricity market on a half-hourly basis, not by individual retailers. Customer prices are adjusted quarterly.
In addition, any changes made to the wholesale price are not likely to directly impact power bills for customers who plan to stay in a market for a more extended period unless there are other external factors at play.
Discount Offers
Discount offers refer to retailers managing their costs by offering cheap rates up to 50% lower than market rates. Although these plans are pretty famous for customers, it is vital to note that the discount offered will be gradually reduced over time.
Usage offers mean retailers generally offer discounts between 20% and 40% off their standard rates if customers use more electricity during peak periods between 4 pm and 10 pm every day.
Green Energy Plan
Green Energy plan is a recent development in the Australian market where retailers offer discounts on electricity use during non-peak periods. Customers pay a discounted rate for off-peak usage and standard rates for peak period consumption.
Red Energy Plans
Red Energy plans are also known as Green Sludge plans and have been around since 2012. These companies offer different rates for different usage levels at any time of the day, not just during peak periods.
Tariffs and Discounts
The government offers tariffs and discounts to residents of different states. Australia’s minimum electricity feed-in tariffs for households and businesses that feed electricity back into the grid is around 12 cents per kWh.
The plan cost will also vary based on whether you choose a residential or commercial electricity plan. The per-unit cost of business energy plans in Australia is usually lower.
Summary
Consider the fee structure, discounts, and deals different energy retailers offer to find cheap power in Australia. Remember that this guide is harmonised to cover all regions in Australia, irrespective of which retailer offers your plan.