Victorian power bills will jump $99 over the next two years, but will then decrease once more renewable energy comes online.
The price hike is due to the closure of the Hazelwood coal-fired power station – Australia’s cheapest generator – at the end of March.
The Australian Energy Market Commission 2016 residential electricity price trends report found wholesale energy prices will jump 36 per cent across the nation thanks to Hazelwood’s shutdown.
Victorian Energy Minister Lily D’Ambrosio said Hazelwood’s closure was pushing prices up in the short term, but the report predicted they would go down again.
“In 2018, Victoria will have a net reduction in electricity prices because more renewable energies are coming into the mix,” Ms D’Ambrosio told reporters on Wednesday.
“That is why we’re committed to growing our own renewable energy targets in Victoria.”
In November, Engie Australia chief executive Alex Keisser said the 50-year-old Hazelwood station was “no longer economic to operate”.
The report estimates a typical Victorian consumer would pay an extra $99 for their electricity in 2018/19 compared to what they would have been charged if Hazelwood had continued to operate.
Those costs could be offset with the arrival of more wind power but only while the demand remains flat.
“Across the national electricity market the generation mix is changing – with the large-scale renewable energy target leading to substantial investment in wind generation. This is contributing to the closure of coal-fired plants and increasing wholesale and retail prices,” AEMC chairman John Pierce said.
Opposition energy spokesman David Southwick said the Hazelwood shutdown was the Victorian government’s fault.
“Daniel Andrews forced the closure of Hazelwood through his $252 million tax grab on coal and go-it-alone 40 per cent renewable energy target, now Victoria and all other states are paying the price,” Mr Southwick said.