The national energy regulator of Australia has stated that it cannot guarantee the Albanese government’s renewable energy plan will reduce electricity prices. This statement was made during a Senate inquiry where Daniel Westerman, CEO of the Australian Energy Market Operator (AEMO), clarified the potential impact of the plan on energy costs.

Senate Inquiry

During the inquiry, National Senator Matt Canavan directly asked Westerman if he could guarantee that the plan would lower energy prices for Australians. Westerman responded frankly, “I cannot guarantee that.” He added that the plan focuses on providing the cheapest path possible to build the infrastructure needed to transition the energy grid to renewable sources and achieve net-zero emissions.

Focus on Costs

Although there are no guarantees of price reductions, Westerman emphasized that Australia’s energy market aims to develop infrastructure at the lowest possible cost. He pointed out that the Integrated System Plan for the energy market considers key elements such as generation, storage, and major transmission upgrades. However, he also noted that this approach doesn’t necessarily mean that wholesale energy costs will decrease.

Cost of the Renewable Energy Plan

The latest plan from the Australian Energy Market places the cost of the essential infrastructure required to reach net-zero emissions by 2050 at $122 billion. This figure does not include new power poles and wires but remains on the lower end compared to other models, such as the Coalition’s nuclear energy plan. According to independent modeling, the Coalition’s nuclear energy plan would cost between $116 billion and $600 billion, providing only 3.7% of Australia’s energy mix by 2050.

Global Evaluation

The Australian energy regulator drew on international expertise and data from the Australian science agency and the Australian Energy Market to assess the cost of the renewable plan. The results showed that the cost of providing a 100% renewable energy mix by 2050 is roughly equal to that of a mix that includes nuclear energy.