Household electricity bills set to rise unless renewable energy rollout speeds up
Australian households will face higher energy prices over the next decade unless governments urgently accelerate the deployment of new renewable energy, transmission lines and large batteries to offset the coming wave of coal-fired power plant closures, officials warn.
New figures from the Australian Energy Market Commission, due on Thursday, mark a major reversal from its previous predictions that prices would fall sharply by 2035. The figures also add to the intensifying political debate as the coalition argues Labor’s green energy targets will lead to unaffordable costs for homes and businesses.
The rollout of renewable energy and the thousands of kilometers of extra power lines connecting them to major cities is behind schedule.Credit: Luis Enrique Ascui
While the Commission expects renewables and batteries to successfully reduce energy prices by 5 percent between now and 2030, these savings risk being wiped out by a 13 percent increase over the next five years because not enough projects are being built fast enough to offset greater coal output.
If these delays are not addressed, the consequences could be serious: Energy reliability will come under pressure as the economy’s rising demand for electricity outstrips supply, while the grid will have to resort to expensive gas-fired generation more frequently to make up for shortfalls in the evenings after the sun sets and solar power wanes, causing wholesale prices to rise.
Commission chair Anna Collyer warns the risk could lead to an increase of 0.8 per cent in average household electricity prices each year until 2035 (an increase of 8 per cent).
“Our price outlook emphasizes a critical five-year window,” he said. “As renewable energy production and batteries increase, residential electricity prices are projected to fall by 2030, but will rise by 2035 if the pace of new investment does not keep pace with rising electricity demand and the planned retirement from coal.”
Australia is pouring billions of dollars each year into new wind and solar farms, rooftop solar panels, batteries and hydroelectric dams, increasing renewable energy’s share of the grid to 40 per cent while adding more clean energy than ever before. Meanwhile, many of the massive coal-fired power plants that still provide the bulk of the nation’s electricity are nearing the end of their usable lives, facing rising maintenance costs and frequent breakdowns, prompting operators to bring forward shutdown dates. More than half of Australia’s remaining coal-fired generators are scheduled to be retired by 2035.
Albania’s government is following advice from the energy market operator and the CSIRO that the best way to replace aging coal plants and reduce bills is to develop a mostly renewable grid supported by storage, power lines and gas-fired generators.
But deployment is stalling at the pace officials and experts say is needed to prepare the grid for a future with less coal, as developers face permitting delays, rising costs and opposition from rural and regional communities concerned about impacts on farming practices, property values and the environment.
