Energy Action Price Index

Energy Action Price Index

What happened to electricity prices last month?


In the Australian energy market, the forward price of electricity for medium to large users fluctuates from day-to-day. Energy Action’s Price Index (Business) (EAPI) provides clarity to the market encompassing pricing from energy retailers via the Australian Energy Exchange (AEX).

EAPI represents the average commodity price of retail electricity paid by Australian businesses based on a Standard Retail Contract (commences in 6-months and operates for 2½ years). EAPI is created from the lowest cost offers submitted by retailers via the AEX and reflects the cost of commodity electricity to commercial and industrial customers.

For more information about the Energy Action Price Index, read our Frequently Asked Questions (FAQs).

Energy Action has redefined the EAPI for South Australia. From 2 February 2016 onwards the Standard Retail Contract for South Australia commences in 2-months and operates for 1 year. This change has been made to better reflect market conditions in South Australia where contract lengths have shortened considerably since late 2015. This change to the EAPI is limited only to the index for South Australia. Standard Retail Contract definition for all other states remains unchanged.


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The Retail Market in January to Mid March 

  • Retail prices have drifted down since December with prices in NSW, VIC and QLD shedding around 4% over the intervening period and SA coming off by a larger 7% but from a much higher base.
  • The shallowness of the overall decline suggests that this may be being caused by a lack of demand from customers coming to market to renew their contracts rather than from a change in the supply side of the market. With very high volumes of business being transacted in the last quarter of 2017 it would be understandable if volumes were much lower coming into the new year and after the 31st December cut off when traditionally many customer contracts expire.
  • Looking further forward, we are currently about as far away from the next hot season as you can get and spot prices during the first quarter of 2019 will not be attracting much attention. Also, having got through this Summer without compulsory load curtailment in SA and VIC (albeit with several instances where voluntary curtailment was called by AEMO on a handful of occasions when supply was insufficient to meet total demand) it may be that the system will be better placed during next Summer by which time more renewable generation and battery storage will be available and the supply of fossil generation will likely have remained the same. This would argue for prices being lower during next Summer than during the Summer just experienced. Nevertheless, the potential for prices to spike again on the back of bad news remains.
  • Longer term contracts remain better value than shorter term contracts although the discount for these has reduced. 3 year deals are pricing at discount to 2 year deals of around a 0.4c/kWh in SA and VIC and a more modest 0.2c/kWh in QLD and NSW.
  • Interest in one year deals is limited but where available these are at a premium to 2 year deals of over 0.5c/kWh.
  • Interest for contracts extending into the first half of 2021 is building. As yet we are seeing little interest into the second half of 2021 although we would expect this to show any time soon.
  • In mid March the SA election brought a Liberal government into power for the first time in sixteen years. The outgoing Labour government was know to be unenthusiastic about the Commonwealth’s National Energy Guarantee. With a new government in place the NEG may have a smoother passage through COAG at the end of April.