Australia has often been referred to as the “Lucky Country”, and this is probably a fair statement given our abundance of natural resources, continued economic growth and unique geographical position in the world. Melbourne routinely hits the top of the list for the “most livable city in the world” according to The Economist’s Intelligence Unit.
One unfortunate consequence of our high standard of living, however, is high electricity prices. According to a study by CME (an energy consultancy focused on Australia’s energy industry), our electricity is among the most expensive in the world.
How was the study on electricity prices conducted?
The CME study compared Australian residential electricity rates to comparable households in OECD countries within Europe, as well as Japan, the United States and Great Britain. In total, 22 countries were assessed and electricity prices were measured in Australian cents per kilowatt hour (kWh). The study also considered factors such as taxes and exchange rates.
OECD countries such as the Czech Republic, Chile, Hungary, Estonia, the Slovak Republic, Turkey, Slovenia and Poland were excluded due to the state of their economic development, and the significant difference in GDP per capita, when compared to Australia.
The study drew data for Australian electricity prices from the Australian Energy Market Commission’s (AEMC) 2015 Residential Electricity Price Trends Report.
How did Victoria measure up?
The study found that when measured at market exchange rates (excluding taxes), Victoria had the highest rate for standing offers at 38.8c per kWh. When taxes were included in the rate, Australia ranked third most expensive after Germany and Denmark.
For market offers, Victoria had rates of 31.6 cents per kWh2.
What’s the difference between standing offers and market offers?
When looking for a deal for your electricity supply, there are 2 main types of offers you will encounter:
- Market offers – which are set by energy retailers;
- Standing offers (standard retail offers) – these are set by the government and depend on your location.
Typically, standing offers are more expensive and prices don’t change more than once every six-month period. Market offer prices can change at any time, and depending on your circumstances, you can receive concessions or discounts on your rate.
Research from the AEMC found that switching from a standard offer to market offer could save you up to 19% in Victoria.
How to find the best market offer rate
Finding the best market offer rate generally involves shopping around to compare the prices of different energy suppliers; but even by making use of the comparison websites, this can be a confusing and time consuming process.
Given energy prices in Australia change daily, as do the retailer’s special offers, consider engaging an independent energy broker to do the groundwork for you. It’s our job to monitor the market and negotiate with the retailers on price, with the goal of saving you both time and money.
Bulk Energy are a boutique brokerage based in Melbourne, who can assist with residential, small business (SME) and commercial and industrial (C&I) energy procurement.