Faster Renewables Needed to Curb Future Price Hikes
A faster rollout of renewable energy, transmission lines, and batteries is crucial to keeping electricity bills down over the next decade, a new report warns.
The Australian Energy Market Commission (AEMC) today released an independent analysis predicting residential electricity prices will fall by 5 per cent over the next five years, driven by a surge in new renewable generation.
However, the report warns this relief could be short-lived. Prices are forecast to rebound and rise by 13 per cent between 2030 and 2035 if renewable projects are not built faster than currently planned.
AEMC Chair Anna Collyer said the market was facing a “critical five-year window.”
“Residential electricity prices are projected to fall through 2030 as renewable generation and batteries ramp up, but then rise through 2035 if the pace of new investment doesn’t keep ahead of growing electricity demand and planned coal retirement,” Ms Collyer said.
According to the report, delays in wind and transmission projects could send annual household bills soaring by up to 20 per cent. Conversely, a speedy rollout could cut prices by a further 10 per cent.
Ms Collyer noted that “well-coordinated” consumer assets, such as home batteries, were vital for managing peak demand. However, she warned that poor integration of these resources could add another 13 per cent to household costs.
To secure long-term affordability, the AEMC recommended cutting red tape for new renewable builds and helping households switch to electric appliances.
While the outlook varies by state – with prices expected to stabilize or fall in NSW and the ACT, residents in Victoria, Queensland, South Australia, and Tasmania may face increases due to tighter supply and higher demand.
