Electricity and gas prices in Australia have continued to fall during the first quarter of this year, according to the Australian Energy Regulator (AER). 

The agency says that the drop is in part thanks to record solar generation, with large-scale solar production up 22 per cent on the previous year. 

Despite upward price pressures from heatwaves over the summer months, the AER report found that prices had remained lower across most regions, including in Queensland where prices had fallen since last year. 

The stabilisation of prices is also less likely to lead to major changes to the AER's final default market offer, which has already predicted price increases of up to 30 per cent from July 1. 

AER chair Clare Savage says the forward prices for electricity stabilised during the early part of 2023 and that “despite an increase in March, they [forward contract prices] remain well below levels observed in 2022”.

It appears that coal price cap interventions continue to place downward pressure on electricity prices, along with strong renewable output. 

However, the proposed closure of AGL's 1500 megawatt Liddell coal-fired power station in New South Wales is likely to “tighten the supply-demand balance, especially in the evening periods when solar output is low”.

Despite the easing of wholesale power prices since the Albanese government's energy market intervention late last year, the AER has approved double-digit electricity price increases for over 600,000 customers on default market offers in south-east Queensland, NSW, and South Australia. Households in Victoria and regional Queensland will be hit hardest, with average annual power bills set to jump 31.1 per cent and 29 per cent respectively.