Qld electricity prices won't fund budget

Marty SilkAAP
Queensland's wholesale electricity prices are the highest in the country.
Camera IconQueensland's wholesale electricity prices are the highest in the country. Credit: AAP

Queensland's public electricity generators' profits will be used to transition to renewables rather than funding the budget, the treasurer says.

The state's wholesale prices leapt to a record $283 per megawatt hour last month and are the highest in the nation.

Spot prices have also surged to $15,100/MWh eight times in Queensland in the last 12 months.

Dividends from public generators Stanwell, CS Energy and CleanCo will be used wipe $14.58 from monthly household power bills from July.

Treasurer Cameron Dick says any extra profits made by generators on the wholesale market will be used to invest in their transition to renewable energy.

"The budget will not make one red cent from the recent period of market uncertainty," he told reporters on budget day.

"All that money will go back into the GOCs (government-owned corporations), which they will use."

It is still uncertain how much state generators have made on the soaring wholesale electricity market in 2021/22.

Tuesday's budget papers said the sector would provide dividends again in 2022/23 and the following year.

"This trend reflects earnings growth of these businesses, with the current wholesale market environment supporting returns in the next couple of years, and a return to more stable levels over the forward estimates," the budget said.

CS Energy will invest $150 million in a 100 megawatt battery at Chinchilla, while Stanwell will spend $207 million on a 150MW battery at Tarong.

Mr Dick has also committed to $13 million in funding for final studies on a proposed 1GW pumped hydro project at Borumba.

The budget will also fund a $35 million feasibility study for a second, 5-7GW pumped hydro project.

There is much more focus on electricity generator dividends this year amid concerns about price-gouging in Queensland's wholesale market.

AER chair Clare Savage last week warned generators against price gouging in wholesale markets.

"Market participants must not make a dispatch offer, dispatch bid or rebid that is false or misleading," she wrote in a letter to generators.

Queensland's 17 coal and gas-fired plants are run by public-owned Stanwell, CS Energy and CleanCo, and private generators Arrow Energy, Alinta Energy, Intergen, Origin Energy, QGC and RATCH Australia.

All of those power stations either own coal mines or gas fields, or are on long-term fuel supply contracts, so they don't pay international prices for coal and gas.

The state government has previously denied public generators have been price-gouging, saying they only offer prices to "cover costs".

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails