‘Consequence of the rush': Energy expert attributes rising electricity bills to Labor's ‘unrealistic' renewables push, as regulator reveals transmission cost blowouts

Sky News AU

26-05-2025

An energy expert has attributed soaring power prices to the Albanese government's renewable energy agenda, with the Australian Energy Market Operator revealing ballooning cost blowouts to the construction of transmission lines.
On Tuesday, the Australian Energy Market Operator announced that 500,000 customers nationwide could experience an eye watering 9.7 per cent rise in their power bills.
The price hike was revealed in the operator's default market offer, of which serves as a price safety net that limits what energy retailers can charge customers in New South Wales, south-east Queensland and South Australia.
Those residing in NSW will incur an even larger price hike than that proposed in the draft form in March and will see their power bills rise by 7.9 to 9.7 per cent, with the average bill increasing by between $155 to $228.
The price increase in south-east Queensland is up by $77 or 3.7 per cent and in South Australia consumers should expect a 3.2 per cent rise amounting to a hike of $71.
Aidan Morrison, the director of energy research at the Centre for Independent Studies said the trend of compounding power bills was due to the Albanese government's 'rushed' renewables energy rollout.
'I think there's two reasons now why these transmission line costs are starting to emerge, it's just way higher than they were initially ever priced, which is always unrealistic,' Mr Morrison said speaking to Sky News host Danica De Giorgio.
'There was this fantastic idea that we just provide one link into the countryside and then all the other generators would sort of link themselves into the grid.
'What's happened in reality is that link gets expanded, so we pay for the transmission lines to run right into all the generation projects that happen out in the countryside.
The market operator outlined in its annual report that the cost for overhead transmission line projects had surged by up to 55 per cent, with substations also rising by as much as 35 per cent.
The report concluded that if the $20 billion cost of transmission infrastructure continued to inflate then power prices would rise even further.
Mr Morrison said 'the price blow out in the latest report from the market operator makes it very clear that's a consequence of trying to build everything all at once, which is exactly what's happening'.
He said the 'rushed rollout of massive renewables, stipulating that everything has to be built before 2030' is causing 'huge competition for all of the materials and all of the contractors'.
'There is a price hike for all the contractors and labouring materials, so the prices go up a lot, and that's what's happening right here.
'It's a consequence of the rush, and it's an inevitable consequence."
Chair of the Australian Energy Regulator Clare Savage accepted that 'there are cost pressures in the system' and the regulator was 'seeing that across each of the jurisdictions'.
Speaking to Sky News Business Editor Ross Greenwood, Ms Savage accepted cost pressures relating to transmission lines were contributing to the energy price pain experienced by consumers, yet repeatedly defended the government's clean energy agenda.
'We have seen some increased costs in the transmission system from new projects like HomeLink and Project Energy Connect, and they are flowing through to bills in New South Wales in particular,' Ms Savage said.
'What I'd also say is that as we do build out this system of the future and we have greater electrification and more people use electric vehicles, we're going to see increased use of those assets, and that should lead to lower prices over time.
Ms Savage reminded consumers that the default offer was used to stop retailers from setting 'unjustifiably high' prices and are 'not intended to be an efficient marker of the best price out there in the market'.
'You don't want to be on the default offer, you do want to be out there, in the markets, shopping around and getting access to the best possible prices.
'I would say though that there are probably nearly 80 per cent of customers who are currently paying more than they need to."
She said that people should be shopping around for a new deal every year, and acknowledged that this was an exhausting process.
'I get tired of saying 'shop around', I can promise you, but I do think it's important and probably every year is a good idea."
Roughly nine per cent of households and 18 per cent of small businesses receive default market offers.