For the eastern and southern states of Australia, the supply of electricity comes from one of thelargest geographically interconnected power systems in the world – the National Electricity Market.
Physically linked by a transmission grid, the NEM is in operation 24-hours a day, 365 days of the year.
A supply chain of generators, networks and retailers, which are required to distribute the electricity from the NEM into Aussie homes and businesses, all contribute to the cost of your electricity bill.
3 costs involved in electricity
When customers receive their Origin Energy bill, it is based on costs incurred from the three ‘steps along the chain’. They are as follows:
- Generators produce the main source of electricity from renewable sources or the burning of fossil fuels. The buying of fuels and the building, operation and maintenance of power plants are where costs are incurred.
- Network businesses own and operate the transmission and distribution systems. The building, maintenance and repairs of new and existing powerlines are where costs are incurred.
- Retailers are the electricity providers for homes and businesses. The connection of customers to the grid, purchase of electricity from generators and management of customer accounts are where costs are incurred.
The cost of generating electricity.
Retail services (15%)
Managing your accounts, billing and customer services.
Paying for the maintenance, upgrading and operation of the poles and wires.
Government green schemes (6%)
The national renewable energy target and other state based schemes.
- Costs included in your electricity bill data based on information found at Independent Pricing and Regulatory Tribunal (IPART), Review of regulated retail prices and changes for electricity 2013 to 2016. This data is based on a typical NSW bill as at June 2013. Note IPART’s estimate of the carbon scheme has been removed and percentages adjusted accordingly.
- Energy purchase value. Australian Energy Market Operator AEMO fact sheet 2016 – http://www.aemo.com.au/-/media/Files/PDF/National-Electricity-Market-Fact-Sheet.ashx