A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) has shown that improving energy affordability in electricity and gas does not oppose Australia’s net zero ambitions.
According to the IEEFA’s Improving Energy Affordability Aligns with Net Zero, measures to reduce electricity and gas costs can also advance progress towards net zero.
Amandine Denis-Ryan, CEO of IEEFA Australia and lead author of the report, said: “The narrative that Australia must choose between lowering bills and cutting emissions is simply false.
“The cheapest energy future is also a clean one. By focusing on renewables, efficiency, electrification and fairer energy markets, Australia can lower household energy bills while accelerating progress toward net zero.
“Renewables are not driving up electricity costs – ageing coal plants, high gas prices and inefficient markets are. There is a lot of room for improvement when it comes to energy affordability – but it is not about choosing a different electricity generation mix.”
The IEEFA report pointed out that Australia’s coal fleet is rapidly ageing and most coal plants need to be replaced within the next decade. The choice of replacement technology will have a significant impact on affordability.
Renewables backed by storage and transmission are the lowest-cost form of electricity generation, and their cost will likely be cheaper by 2030.
The IEEFA highlights that cost overruns across large projects are unavoidable. However, reducing delays in the deployment of new renewable generation, transmission and storage assets can help improve energy affordability.
“Making our markets and rules work better should also be a big priority. Fixing regulatory issues – such as systemic supernormal profits by electricity and gas networks – could deliver billions in consumer savings.
“Market concentration and lack of transparency in gas and electricity markets are also key drivers of high prices, and reforms to improve competition are essential,” Denis-Ryan said.
