Power bills set to rise by up to 9 per cent in headache for Albanese

Bowen on Thursday said power prices were being driven higher by ageing coal-fired power stations, which had become increasingly expensive to operate and were breaking down more often.

Sudden plant outages were leaving the market undersupplied with zero notice, he said, forcing expensive gas-powered generators to ramp up to plug the gaps, and driving volatile swings in wholesale prices.

“We’ve seen energy price spikes right around the world since [2022],” Bowen said. “But what hasn’t changed is the fact that every bit of renewable energy you introduce puts downward pressure on prices, and if you are planning on keeping coal in the grid for longer that puts upward pressure on prices.”

Prime Minister Anthony Albanese promised at the 2022 election to cut power bills by $275 by 2025 under his plan to expand renewable energy to 82 per cent of the grid by 2030.

However, bills have risen by up to $400 for some residents in NSW and up to $250 for some Victorians since he was elected, largely due to the fallout of a global energy crunch raising the prices of coal and gas.

Wholesale power prices were also driven up last year after a prolonged stretch of cold weather coincided with a wind power drought, creating a temporary spike that flowed to this year’s bill hikes.

Albanese will rely on an expected third round of power bill subsidies in the federal budget on March 25 to quell voter anger.

The price rises announced on Thursday will increase default offers by between 2.5 per cent and 8.9 per cent across most of the east coast. In Victoria, which sets its own offers, prices will remain “relatively flat”, ranging from a cut of $19 to an increase of $68 depending on the region.

Dutton has criticised the government’s pro-renewables energy policy and said a “balanced energy mix”, including nuclear power, was needed. He claims the Coalition’s nuclear policy would deliver 44 per cent cheaper electricity bills by 2050.

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However, many industry leaders, experts and top energy officials reject that claim, cautioning nuclear is a “comparatively expensive” power source. The CSIRO and the market operator say nuclear power will not lead to lower energy bills, and have calculated that a grid dominated by renewables and backed up by gas would be significantly cheaper.

There are also concerns about keeping coal-fired generators in the grid until nuclear facilities are operating, with utility companies warning their ageing plants cannot continue running long enough without reliability risks and volatile prices.

Australian Energy Regulator chair Clare Savage on Thursday said accelerating investment in renewables was the best way to restrain energy prices.

Explaining some of the drivers behind this year’s default electricity price rises, Savage said unplanned outages at coal-fired power stations had played a major role.

“[Coal plants] are ageing, they are not being maintained, and they are falling over unexpectedly,” she said.

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