New research from the Page Research Centre in partnership with the Alliance for Responsible Citizenship, lays bare the cost of Australia’s current energy trajectory. The findings are clear: our push for a renewables-dominated grid is driving up household power bills, weakening energy security, and slowing economic growth.
The report finds that in real terms, electricity prices have soared 60% in the last ten years. At the same time, renewables have surged from 8% to 34% of the energy mix—yet rather than lower costs, this shift has contributed to a 2.4% drop in household living standards, which corresponds to an annual reduction of $3,400 per household and a projected $81 billion hit to GDP in 2024 alone.
Economic Impacts
The sustained rise in energy prices has had severe economic repercussions:
- GDP Decline: Real electricity and gas price increases of 60–70% since the late 2000s suggest a potential GDP reduction of 3%, equivalent to $81 billion in 2024–25.
- Household Living Standards: Higher energy costs have led to a 2.4% decline in household living standards, solely attributable to increased energy prices. This corresponds to an annual reduction of $3,400 per household, based on an average gross income of $142,000. These impacts disproportionately affect low-income families, exacerbating inequality.
Policy Pathways and Trade-offs
Australia faces critical energy policy decisions, with each potential pathway carrying distinct costs, benefits, and trade-offs. To assess the nation’s energy future, we analysed the full system cost of four scenarios:
- No Net Zero Scenario:
- Overview: Ultra-supercritical coal at the mine mouth is the most cost-effective technology for 24-hour reliable supply.
- Investment: Requires the lowest capital expenditure of $103 billion.
- Impact: Wholesale electricity prices range from $50–$100/MWh, with retail prices potentially decreasing by up to 25%, offering significant short-term economic relief.
- Technology-Neutral Pathway:
- Overview: Incorporates nuclear energy to balance environmental goals with affordability and reliability.
- Investment: Requires $163 billion in capital investment.
- Impact: Wholesale prices are projected at $100–$150/MWh, with retail prices varying from a 4% decrease to a 35% increase. While upfront costs are higher, nuclear energy provides a stable, low-emission energy source.
- Current Policy Pathway:
- Overview: Favors offshore wind, solar, and battery energy storage systems (BESS).
- Investment: Requires $261 billion in total investment ($198 billion in CapEx and $30/MWh in transmission costs).
- Impact: Retail prices are expected to rise by 30–69%, with wholesale prices ranging from $150–$200/MWh. GDP could decline by an additional 1.44–3.31%. This pathway risks failing to achieve net-zero goals while undermining energy security.
- 100% Renewable Grid:
- Overview: The most ambitious scenario envisions a fully renewable grid.
- Investment: Demands $332 billion in investment ($255 billion in CapEx and $77 billion in transmission costs).
- Impact: Retail electricity prices could rise by up to 69%, with significant concerns about energy reliability and long-term feasibility.
Australia stands at a critical juncture in energy policy, facing the challenge of balancing affordability, reliability, and sustainability. Current policies centered on renewables have driven up costs and raised concerns about energy security and economic resilience. Bold, technology-neutral approaches—such as incorporating nuclear power and advanced coal technologies—can align environmental goals with economic priorities.
Prioritising reliable, cost-effective energy solutions over ideological preferences is essential to safeguarding Australia’s prosperity, protecting household well-being, and ensuring energy security for the long term. These decisions represent not just an economic imperative but a defining moment for the nation’s future.
