Maguire: Australia's renewable energy boom will deliver a coveted price for power

Australia's wholesale power prices dropped to their lowest level in four years by 2025. This bucking of rising prices elsewhere, and proving that renewables-intensive power systems can lower power costs for consumers.

The increased battery storage capacity, and the solar farms could allow utilities to reduce operating costs. These savings may be passed on to businesses and households as early as this year.

According to Ember, an energy think tank, Australia's electrical system has been undergoing 'one of the most aggressive' overhauls in the last decade. The clean electricity production has more than doubled since 2019.

This growth rate is far greater than the 39% increase in clean electricity worldwide over this period. Europe experienced a 12% increase in clean output while North America experienced a 16% increase.

Since 2019, Australia's electricity generators have also reduced fossil fuel electricity supply by more than what is seen in Europe, North America and the rest of the world. This has earned Australia its position as a global leader?in energy transformation momentum.

CLEAN SHARE RISING, PRICES FALLING

The rapid expansion of Australia's clean energy capacity led to a significant power mix milestone in 2025. For the first time, more utility electricity was supplied by clean sources rather than fossil fuels.

The pace of clean energy growth in Australia since then is a testament to the extent of the utility sector's retooling.

As utilities pass on the costs of new generation capacity and upgrades to networks, such rapid overhauls have led to steep increases in electricity bills for consumers.

Australians certainly have experienced their fair share of energy price inflation over the past few years. Average national electricity prices soared by more than 200% between 2022 and 2021, and since then they have averaged 60% higher than levels seen in both 2020 and 2021.

The price dynamics of Australia's biggest wholesale electricity markets in the last year or two suggest that this trend is now shifting to the opposite.

DOUBLE DIGIT DECLINES

Data from LSEG (Australian Securities Exchange) and LSEG shows that wholesale electricity prices in New South Wales, Queensland and Victoria, as well as South Australia, declined by an average 11% from the totals of 2024.

Queensland's prices fell the most, by 15%. New South Wales followed with a 13% decline.

In 2025, the average price of New South Wales (Australia's largest state) with the highest energy costs was just below $109 per megawatt-hour (MWh), compared to $125/MWh for 2024.

The average price in Queensland was $95/MWh, the lowest annual figure since 2021.

In Victoria, prices were around $75/MWh while in South Australia they were around $89/MWh.

PROTRACTED Pass-Through

It can take a long time for wholesale market changes to be reflected in consumer bills. Australians have not yet seen the benefits of wholesale electricity prices falling by a large amount in 2025.

It is true that, with the record deployment of energy storage battery capacity in recent times, utilities have a good chance to meet increasing electricity demand by using battery systems and solar farms, which can further reduce output from fossil-fuel power stations.

This should enable them to reduce their overall operating costs, and pass on any savings they make to consumers?and businesses.

Australians are grateful for any future reductions to their household bills, especially after an inflation rate of almost 4% by 2025.

The future of Australian electricity prices will be closely monitored by utilities from Europe, North America, and other countries, who are evaluating whether clean power pathways taken in Australia can be replicated elsewhere.

These are the opinions of the columnist, an author for.

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(source: Reuters)