Black coal electricity generators face rising prices for coal as increased competition from local rivals and energy-hungry Asian countries drive demand.

Bloomberg New Energy Finance’s Second Half Australia Power Market Outlook said an increase in Asian demand for high-quality Australian coal had lifted thermal coal prices, which has flowed on to households’ power bills.

The rising cost of thermal coal has played a major role in the rising cost of wholesale energy costs, one of the driving factors for higher power bills. Credit:Rob Homer

That came at the same time, the report said, as the Victorian Hazelwood coal-fired power plant shut down in 2017 forcing forced other generators to lift their electricity output and dragging coal consumption above contracted supply levels to ensure the lights stay on.

Black coal – as opposed to brown coal that powers Victoria’s generators – makes up around 54 per cent of the east coast’s energy mix. While the generators typically have contracts for coal supply, they do buy extra coal at spot prices to ensure there is enough coal to meet power demand.