Wholesale electricity prices have been falling in recent days. However, they are still double year on year!
Prices have been easing in the weak demand shoulder season as the gas cartel plays dead going into the election.
However, ahead are still some very difficult problems with very severe outcomes.
With futures up 25% year on year, there will be another 5-10% electricity price rise in 25/26.
Worse, with LNG imports to begin later this year, the cartel will immediately go to work choking supply to lift the local price to import parity.
At the moment, JKM futures have eased a a bit but the LNG import price still be around $20Gj.
This trigger another round of price rises in mid-2026, in the realms of 50% if nothing is done to offset them.
Labor is pretty obviously preparing for this with another round of bill rebates in their pre-election budget. The Australian.
The budget narrative will focus on acknowledging that the inflation fight is not over and provide cost-of-living support for more Australians doing it tough in the suburbs.
But rolling over existing rebates will not be enough; they will have to increase them 50% to $4.5bn.
The LNP has committed to scrapping the rebates so its shock will be huge, around 70% on existing bills.
All other things equal, the only factor that can change this is an outbreak of peace in Ukraine and the resumption of gas flows to Europe.
Not impossible, maybe even more likely than not now.
But hanging your energy security on the outcome of foreign wars you cannot control is incredibly stupid.
Blanket gas reservation and a $7Gj export levy now.
