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Dramatic decline in electricity prices predicted as a result of the NEG

The AFR published an article last night which refers to the final design of the National Energy Guarantee (NEG) which was provided to the state and territory leaders on Monday. Within the article is a graph containing forecast NEM wholesale prices (real 2018 $/MWh) from FY18 to FY30, as seen below. The forecast comes from Acil Allen Consulting. Unfortunately, the graph is all that is provided and is therefore impossible for the market to understand what the assumptions are behind the modelling. When releasing forecasts that show dramatic changes in energy prices it should be explained in detail so that stakeholders can understand the key drivers behind the decline. By making the assumptions available, stakeholders are then empowered to make their own assessment on the accuracy of the forecast.

Source: Australian Financial Review.

The Federal Government is claiming that under the NEG households can expect to save an additional $150/year.

The NEG has gained support across the energy market and looks like it will be agreed on by the states and territories. Federal Energy Minister Josh Freydenberg is scheduled to meet with state and territory leaders on 10 August to gain approval of the policy. If successful the NEG will begin in 2020.

If you would like to understand more about the NEG and the potential impact it may have on your energy portfolio moving forward, please visit or alternatively you can call one of our team directly on 07 3905 9220 or on 1800 EDGE ENERGY.