Are Australians Really Paying More for Electricity Than the Rest of the World?
It’s a common belief that Australians are shelling out more for electricity than ever before, and that the shift to renewable energy is to blame. But is this really the case? Spoiler alert: The truth might just flip your switch.
Let’s dive into the numbers and separate fact from fiction. And this is the part most people miss: Australia’s electricity prices aren’t actually higher than most other countries—they’re squarely in the middle of the pack. According to the Australian Energy Council, between 2023 and 2025, the average electricity price for Australian households was 39 cents per kilowatt-hour (kWh), just above the OECD average of 38 cents per kWh. This placed Australia as the 15th most expensive out of 38 countries. But here’s where it gets controversial: When you adjust for the cost of living, Australia’s ranking drops to 24th, well below the OECD average. So, in terms of affordability, Aussies are actually doing pretty well.
But wait, hasn’t Australia lost its edge on cheap energy? Not exactly. A decade ago, Australia ranked 21st out of 32 nations for residential power prices, adjusted for purchasing power. While prices have risen significantly since then, other countries have seen similar increases. The International Energy Agency’s data on wholesale electricity prices tells a similar story: Australia has consistently hovered around the middle of the pack since 2018.
Now, let’s talk bills. Despite the perception of skyrocketing costs, Australians on the east coast are actually paying less for electricity now than they were three years ago—thanks to generous subsidies. For instance, in NSW and South Australia, the median household electricity bill in September 2024 was 5%-7% lower than in 2021. Queenslanders in the south-east have seen their quarterly bills drop from $230 to a $100 credit. But without these subsidies? Bills would have climbed by 19%-22% in NSW and South Australia, 14% in Victoria, and a staggering 66% in south-east Queensland.
So, what’s driving these price hikes? Johanna Bowyer, lead analyst at the Institute for Energy Economics and Financial Analysis, points to wholesale electricity prices and network costs as the main culprits. Here’s the kicker: Renewable energy isn’t the villain. Instead, rising coal and gas prices have been the key drivers over the past decade. Gas prices, in particular, have a ‘near perfect’ correlation with electricity prices in the east coast market. Coal-fired power plant outages have also pushed up wholesale prices recently.
But why aren’t renewables making power cheaper yet? While generating power from renewables is inexpensive, the cost of building the infrastructure—batteries, transmission lines, and ensuring reliable supply—has been higher and slower than expected. As Tony Wood of the Grattan Institute puts it, ‘We’ve underestimated the cost of getting this power to markets and ensuring it can be firmed.’
So, what’s the solution? Bowyer suggests more renewable energy and energy efficiency, especially for households. Switching to rooftop solar and storage, along with efficient electric appliances, could slash energy bills by 80%-90%. But here’s the question: Are Australians ready to embrace these changes, or will they continue to point fingers at renewables? Let us know your thoughts in the comments—this debate is far from over.
