Wholesale electricity and gas prices climbed leading into winter but remained far lower than the extraordinary cost spikes experienced a year earlier, the national energy market regulator has reported.
In a significant update on the state of the nation's energy supplies, the Australian Energy Regulator said that although spot prices for electricity and gas rose in the June quarter, lower international prices, fewer generator outages and bigger reserves helped contain the increase.
The outcome might be of cold comfort to households being hit with large increases in their electricity and heating bills.
From July 1, electricity prices for around 600,000 customers were set to increase between 19.6 per cent and 23.9 per cent in New South Wales, South Australia and south-east Queensland, and by about 25 per cent in Victoria.
But some ACT concession card holders are eligible for assistance worth up to $750 and the federal government is offering five million households up to $500 in power price relief while one million small businesses will be able to access up to $650.
The AER report shows energy retailers are under much less strain than they were this time last year, which could improve prospects for more modest price hikes and help reduce inflation pressures in the economy.
The regulator said a combination of increased demand in the southern states as they moved into colder weather, the closure of the Liddell power station and "reduced cheap coal capacity" in Queensland and New South Wales helped push up electricity prices in the quarter while supply and transport constraints at Longford and along the Moomba to Sydney pipeline pushed the wholesale gas price to an average of $14.50 per gigajoule.
But, offsetting these challenges, an extra 1100 megawatts of solar, wind and battery power was added to the electricity grid over the same period and Victoria's Iona gas storage facility reached "a high level of capacity".
AER board member Justin Oliver said the last year's second quarter was "an extremely challenging time for the sector [and] we're pleased the factors that drove the high prices at that time weren't present to nearly the same extent this year".
During the June quarter in 2022, average wholesale electricity prices in Queensland and New South Wales soared above $300 per megawatt hour and international gas spot prices spiked above $70 per gigajoule.
In June quarter this year, the international gas spot price has hovered around $14 a gigajoule and average wholesale electricity prices in Queensland and New South Wales were below $150 a megawatt hour.
Mr Oliver said there had been far fewer coal generator outages, greater coal supply, strong gas flows and increased gas storage levels, "which is critical for managing supply-demand shocks".