Your power bill is made up of the following costs:
– 39% of your bill is the cost of actually generating the electricity, whether from renewable energy or fossil fuels. This is ‘wholesale power’. The rising cost of producing power from gas, and the closure of several old and inefficient coal power plants in South Australia and Victoria has caused the wholesale price of power to rise in recent years. However, the Clean Energy Council says the wholesale electricity price is expected to decrease by an annual average of 5.1 per cent from 2018-19 to 2020-21 as more than 4500 MW of new large-scale renewable energy generation enters the market to ease supply-side pressures.
– 44% of your bill is the cost of the poles and wires that carry the electricity from power plants to your home or business. It is not cheap to keep the poles and wires well maintained and to build new parts of the electricity network when required.
– a third component of your power bill is the cost of the electricity company’s administration and marketing, and this component has been one of the biggest causes of recent price rises. It covers the cost of maintaining customer databases and billing processes at electricity retail companies, as well as marketing to win new customers. These costs were found to have accounted for anything between 12%-25% of the average electricity bill.
– the last component of your bill covers environmental costs, which includes the cost of meeting the national Renewable Energy Target, as well as the ongoing costs of rooftop solar power support schemes. This cost varies from state to state.