Energy regulator warns of decade-long price pain without rapid renewables push
News.com.au
December 4, 2025
Australians are being warned their electricity bills could spike if there is not a dramatic increase in energy supply.
The Australian Energy Market Commission (AEMC) said households could be paying up to 13 per cent more from 2030-2035.
This is based on a lack of supply over the next decade and the current pipeline of renewable energy projects, they say.
Australia needs to increase its renewables, particularly wind or risk paying more for power.
According to their latest forecasts, power prices will actually fall by 5 per cent a year over the next five years as new projects start.
But after that five-year period households could be left paying more as Australia falls behind on renewable projects.
When combining the initial decline in power prices before the uplift in costs, AEMC warns Australians will pay about 0.8 per cent a year more for power through to 2035.
AEMC chair Anna Collyer said an increase in renewables and batteries through to 2030 was crucial to keeping electricity prices down.
“Our price outlook highlights 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,” she said.
The AEMC states it is an outlook and not a guarantee of future prices.
The new report puts pressure on the Albanese government’s energy policy which says they can supply 82 per cent of the country through renewables by the end of the decade.
Energy minister Chris Bowen says the AEMC makes it clear the importance of moving on from an ageing, unreliable coal powered economy.
”It’s simple; when coal breaks down, your bills go up,” Mr Bowen said.
“That’s why we’ve got to keep rolling out reliable renewables and help more households embrace solar and batteries.”
According to the energy commission, the retirement of coal power stations and an uplift in home solar will help lower energy prices.
The regulator warns that delaying renewable projects post 2030 could increase annual household electricity prices as much as 20 per cent.
While poor co-ordination of consumer energy resources could add up to 13 per cent to electricity prices.
“The risk of prices rising after 2030 only emerges if we slow down renewable deployment just as coal plants retire,” Ms Collyer said.
“This is a timing challenge, not a technology cost issue. With the right pace of investment, we can manage the energy transition while keeping prices stable.”
Households are being warned to electricify their homes.
According to the AEMC there are steps households can take to avoid this energy price jump.
These include households reducing their total energy costs by up to 90 per cent by going fully electric from today.
They say this includes switching to an electric vehicle, electrifying gas appliances, installing solar panels and household batteries.
Combined AEMC says this would save households around $900 a year or 15 per cent of their current spending on energy over the next decade.
“The ongoing savings from electrification generally exceed the upfront costs a household would incur,” the AEMC report stated.
“While costs and benefits vary between household types, typical payback periods are less than 10 years if households electrify today.”
The AEMC says the greater savings can come from switching away from gas.
“This is because our typical household starts with ‘all gas’ appliances, whereas last year we assumed they had already partially electrified some gas appliances.” it stated.
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