[rosege]

I'm in SA and I'm currently looking at getting solar panels and maybe a battery because we have the highest cost of electricity in the country. I'd like to know why we have the highest when the price seems to be going negative every other day?

[stephen_g]

Historically it has been expensive because S.A. was always reliant on a lot of gas and imports.

More recently though - if consumers have been willing to pay that much, then the private monopoly that runs the distribution network and the private companies that run the generators and retailers don’t really have much incentive to drop prices...

[roenxi]

The market reacts quite quickly if a company is going bankrupt; so assume for the sake of argument that all the electricity producers in the market are turning at least a small profit.

If power prices are negative but the provider is making a profit, then at some other time prices will have to be very high to bring the average price sold positive.

I assume that is what is happening here. I don't have a lot of respect for SA's electricity strategy, but it may work out. At least there are interesting opportunities if anyone can think of a way of profitably sinking vast amounts of power; there has to be something useful that can be done. Ironically in this case, using more power might reduce power prices because the providers don't need to charge as much in off-peak times.

[rosege]

So perhaps they should drop the costs to encourage more usage and thereby also reduce the wholesale cost.

[roenxi]

Bunch of stuff they should be doing; negative power prices are an economic emergency. If your lot can figure out something that works for consumers I'm sure we'll start copying it up and down the east coast. I'm glad it was NT doing this expensive experiment and not NSW; for all that we've mucked up our electricity markets something shocking.

[ENGNR]

Wholesale is only around 30% of what you pay. Distribution takes 40%, and retail (customer support and sending bills) is the other 30%

As for why it's what way... probably regulatory capture

[beefield]

Not knowing anything, but making an educated guess. Transmission costs?

[rosege]

Possibly - but NSW, QLD & TAS are well known to have "gold plated" their network and still have lower cost than here.