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Energy crisis: facts and figures explored

June 9, 2022

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Energy prices haven't picked a good time to soar - if there's ever a good time for them to do so - with a cold snap right across Australia's east coast seeing residents turning on heaters and electric blankets.

But to be fair to electricity, gas and oil, there are a solid bunch of reasons why their skyrocketing prices are now featuring across the country's headlines.

Industry experts have explored these reasons back to front including that of the Russian-Ukrainian war, generator outages and shutdowns, nasty weather conditions and of course, the need for more renewable energy sources.

The Australian Energy Regulator (AER)'s recent decision to increase energy prices in some states essentially came off the back of these reasons.

But these reasons still bring with them many questions, the answers to which Moving Loop is more than happy to give.

Read on to find out more.

Australia has plenty of fossil fuels so why are global issues affecting us so much?

Yes, our lucky country has a fair amount of its own gas, coal and oil supplies but we export most of them.

In fact, a 2019 report from the Australia Institute Climate in Energy Program, revealed Australia was the world's third-highest exporter of fossil fuels, with only Russia and Saudi Arabia higher up the fuel chain.

We're also the world’s fifth-largest miner of fossil fuels, behind China, the US and again, Russia and Saudi Arabia.

So, telling the global trading market that we've changed our minds and we'd like to keep our fossil fuels right here, thank you very much, can't be done easily or swiftly, if at all, says The University of NSW's business school’s associate professor, Katja Ignatieva.

Add supply chain trade dramas (thanks COVID) to the mix and despite our large energy supplies, we're still heavily reliant on global imports to keep our heaters on and our food nice and cool.

Oh, and the RBA's elephantine cash rate rise to 0.85% on Tuesday didn't help Australians keen to hold onto their cash to pay off their higher bills.

Little wonder that federal treasurer Jim Chalmers has described the global energy crisis as a "perfect storm".

Australia's energy crisis
Power bills are set to remain high for months to come

Why is the Russian-Ukrainian war affecting Australia's energy prices?

The EU, the UK and the United States have now banned almost all fossil fuel imports from Russia - which is the main EU supplier for such imports - so Australia is not the only country to be affected by an energy crisis.

And too, with this ban has come a higher need for Australia's fossil fuels.

However, it's important to note that energy prices were already rising before Russia's invasion of Ukraine.

Could Australia rely solely on renewables for its energy?

Not yet, unfortunately, but if we could, it would certainly turn around the perfect storm energy crisis we're experiencing.

Tasmania and South Australia are certainly showing the rest of the country that solar and wind farms can give back in spades when it comes to energy.

Tasmania's energy production comes almost entirely from renewable energy sources, according to the Clean Energy Council while more than 60% of South Australia's energy is now sourced from the wind and the sun with the state government aspiring to achieve 100% net renewables by 2030.

South Australia is second only to Denmark when it comes to global areas that rely almost entirely on renewables for energy, while another recent triumph is the state's rise to becoming a net exporter - rather than an importer - of electricity.

For now, however, the rest of the country still relies heavily on coal and gas and as a result, the energy crisis will affect almost every household and business.

But when it comes to Australia's renewable energy sources, it's not all bad news.

For a start, we are now in the transition stage of closing our major coal-fired power plants and increasing our wind and solar farm numbers, Prof Ignatieva says.

She added that renewable numbers are also seeing some coal plants retire ahead of schedule.

In 2021, solar and wind farms supplied 32% of Australia's electricity, up nearly 5% from 2020, according to the Clean Energy Council.

Adding 2955MW across 27 new projects in 2021 were Australia's three largest solar farms and two of the country's three largest wind farms.

So, we're getting there and the energy crisis now has plenty of eyes fixed on renewable sources - but it may take awhile for the country to reach South Australia's renewable energy status.

When will my energy bill costs subside?

Don't expect much change anytime soon, Prof Ignatieva says.

Some industry experts are even warning that the crisis could last for years.

But medium to long-term possibilities are a different matter including that of relying far more on wind and solar for energy.

For this winter at the very least, prepare to rug up more (dressing in several different layers is always a good idea) and buy more rugs and doonas, rather than turning on the electric blanket or heater.

We're here to help

We don't want you to lose sleep over big energy bills so if this energy crisis is really getting you down - and not even layers and a double covering of blankets is helping you stay warm - talk to Moving Loop.

We love comparing energy plans, rates and deals with Australia's leading energy providers, including opportunities to switch to solar power.

We're also pros when it comes to internet provider comparisons and we love taking care of your removalist stresses when you're moving house from finding and co-ordinating the ideal removalist, to helping you pack up.

And we've saved the best news to last - Moving Loop is free!

Visit Moving Loop to compare, switch and start saving.

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