The closure of Victoria’s Hazelwood coal-fired power station will add an average of $78 a year to energy bills around the country, a new analysis claims.

South Australians will have $150 a year added to household bills, Victorian power bills will rise by $99, a typical New South Wales consumer will pay an extra $74 a year for their electricity, while Queenslanders will pay an extra $28, due to to the upcoming closure of Australia’s cheapest – and most polluting – power generator.

The Australian Energy Market Commission 2016 residential electricity price trends report found wholesale energy prices would jump 36% with the planned shutdown of Hazelwood in March.



“Across the national electricity market the generation mix is changing – with the large-scale renewable energy target leading to substantial investment in wind generation,” the commission’s chairman, John Pierce, said on Tuesday. “This is contributing to the closure of coal-fired plants and increasing wholesale and retail prices.”

The federal energy minister, Josh Frydenberg, said the government was trying to keep prices down while maintaining energy security.

Frydenberg said an increase in coal royalties in Victoria and an increased renewable energy target had forced Hazelwood’s French owners Engie to shut the plant down.



But the Victorian minister for energy and climate change, Lily D’Ambrosio, said the federal government’s lack of leadership on energy policy was to blame for the price rises.

“Everybody is sick of the lack of leadership and silly political games being played by the commonwealth, let’s get on with it and do what we were elected to do,” D’Ambrosio said.

D’Ambrosio told ABC News 24 that while the report showed there would be initial price rises with the closure of Hazelwood, it also showed prices would moderate as more renewable energy came online.

“More renewable energy actually puts downwards pressure on power prices for families and businesses,” she said.

In November, the chief executive of Engie Australia, Alex Keisser, said the 50-year-old Hazelwood plant was “no longer economic to operate”.



“Engie in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation,” Kesser said at the time.

“Given current and forecast market conditions, that level of investment cannot be justified.”



The AEMC report also noted that electricity prices would be affected by the price for gas through gas-fired power stations, and was expected to play a larger role in the market in the future.

“Any future increase in the price of gas will result in higher input costs for generators, flowing through to higher costs in the wholesale electricity market,” Pierce said.

For 2016-17, the total average bill for the year is estimated to be $1,353 — a 4.4% increase from the year before.

The Council of Australian Governments energy council will meet in Melbourne on Wednesday to look at regulations around new interconnectors, and efforts to ensure cheaper gas supplies.

• Australian Associated Press contributed to this report